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Plastic Money

Plastic Money

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Published by: gkmrmanish on Dec 01, 2010
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Plastic money is here, there & everywhere:
The concept of ‘Buy Now, Pay Later’ dates back the to late 1960s & 70s with the introduction of plastic money in the western nations. It originated because the people wanted a convenient and rapid means of accessing their bank accounts. Also, the exorbitant price of money changing hands between the consumer, merchants and the banks led to the diffusion of this concept in the banking system. For spendthrifts and habitual borrowers plastic money induces spontaneous and on-thespur spending. But its advantages in terms of convenience, flexibility and safety far outweigh its pitfalls. Provision for easy repayment gives the card the liquidity of cash along with the accountability of credit card. In the past 20 years these cards have proliferated the world market so successfully that they have altered the face of retail banking. With the power of plastic ruling the world, India cannot remain behind. With a slow and steady move towards scrip less trading the country is moving towards cashless transactions. The plastic money market is bubbling with activity with both Indian and foreign banks vying to expand their market presence. While the foreign banks have been hogging the limelight Indian banks are the slumbering giants. The latter have the advantage of a


large customer base, branch network along with low service charges. These advantages need to be tapped to realize the full potential of these banks.



main purpose to serve on this topic under the Dissertation is to discover the

accurate dimensions of the Plastic Money. As every project has its own specific purpose, my project is to: 1) Find out that how the credit card may help in the development of an economy like ours a developing economy. 2) Find out what is required to do for a credit card market and to establish credit card as a special security tool. 3) Find out the reasons of fear in the mind of the customers during the acceptance of the credit cards. 4) To understand the toughness of the credit card market due to emerging competition. 5) To know the credit cards procedure, documentation and the growth of credit cards in Indian context. 6) To know the credit cards division of the Banking Industry very closely. 7) To understand the impact of credit cards in the purchasing power of consumers. 8) To determine whether consumers are aware of credit card and its advantages. 9) To determine the consumers acceptability and likeness towards credit card. 10) To find out the features, which attract consumers towards credit cards and the parameters, they use to compare the credit cards.


Payment of school/ education expenses. Instead of carrying unmanageable weds of cash. the card holder enjoy the flexibility and safety of purchasing any thing from groceries. For the Settlement of club bills. A form of 'near money' these cards are issued by commercial bank to people whose creditworthiness has been ascertained. For the Payment of insurance premium. cosmetics. Credit Card provides the card holder with authorized line of credit of some specified amount. For Cash withdrawals. Such cards may be used for following purposes:• • • • • • • • • Purchase of air. television. For starter. Payment of phone. Refilling the fuels in vehicles. For the Payment of purchase bills.CREDIT CARD AND ITS FUNCTIONS. and washing machines by using his credit card. Banks ask for TDS certificate or income tax returns document before enrolling a member. petrol to high value items like refrigerators. water and electricity bills. 4 . a credit card is as good as bank behind it. rail and road tickets for traveling For the Settlement of hotel bills.

The start of the year. just when you most need it. Besides. you can expect to be billed the annual fee every March until you cancel your card. You can opt to pay 5% of the total amount on or before the due date. you can even use the reward points you have accumulated from using the credit card over the year to settle your annual fee. remember that. is your membership year. It is a convenient and safe alternative for cash. risky and sometimes. and not the calendar year. because your bank does!  SALIENT FEATURES OF CREDIT CARDS ANNUAL FEE All credit card issuers charge an annual fee which is payable at the start of the year. of course. but more importantly. it says that you have taken the onus of being responsible . which it most certainly bestows on you. A Credit card is the smart solution to these problems. if you got yourself a card in March. When the time comes for renewal of your card.to be extended credit! So. you run short of it. this fee is sometimes waived the first time.WHAT ARE CREDIT CARDS? A Credit Card is referred to as 'plastic money'. FORWARDING BALANCE (OR REVOLVING) The most attractive feature of a credit card is that you need not pay off your dues in whole. Most people associate a credit card with a prestige. it says things about you. (Remember the SALE at your favorite ready-mades store?). Carrying a lot of cash on you can be cumbersome. So. every 5 . when you get yourself a card. As a privilege.

but when you look at the interest rate over the year.5% to 3% per transaction. the rest is carried forward.month. It might sound low at 3%. APR OR ANNUAL PERCENTAGE RATE The interest rate that reflects the yearly cost of the interest the outstanding on your card is called the annual percentage rate. THE NECESSITY OF CREDIT CARDS 6 . CASH ADVANCE An important feature .lets you withdraw cash from designated ATMs using your credit card. But there's a price to pay for this extended credit interest! Normally. This rate is charged to the card holder on the amounts carried forward beyond the due date for the payment of balances. it turns out to be as high as 43%. Most card issuers will tell you their monthly rate of interest. interest varies between 2. around 2.5% and 3% per month. Use discretion when withdrawing cash on your credit card because the charges for this facility are high.

shares.If it is for the convenience of not carrying cash then a debit card can suffice. Almost all banks offer overdraft facilities at reasonable rates to customers who have salary accounts with the said bank. up to 90% of the value. For those who want to use the credit facility at a reasonable cost then we suggest that they use facilities like overdraft against salary accounts or loan against fixed deposits or shares. For overdraft against salary accounts the rates being quoted in the market are very competitive and are as low as 1% per month on a reducing balance. as well as to the general public. banks provide overdraft facilities against collateral like NSCs. and up to 65% of the face value or against fixed deposits at 9% p.a.a.5% per annum for overdraft against fixed deposits? ADVANTAGES OF HAVING A CREDIT CARD 7 . fixed deposits. then last week we had highlighted the high cost of using such credit where the customer ends up paying more than 5 per cent interest per month depending on the amount of credit due on the card. in case you don't have the cash to pay off your credit card bill in one month then it makes more sense to take an overdraft for that amount to repay the bill because the interest on the overdraft works out far cheaper than what the card company will levy on you if the payment is not made in time. one can avail an overdraft facility against NSCs at 13% p. etc. 40. For the general public. if it is for the free credit that the companies claim they give.95% interest per month on an amount of Rs. And. which is called a clean overdraft. Then why should a customer pay 2.000 to a credit card company when he can pay 1% interest per month on the overdraft against the salary account or 8. Similarly. Going a step further. Salary account holders can avail of the overdraft without any collateral. Rolling credit on the card is not feasible as the interest paid on credit cards is phenomenally higher than what is charged on overdraft facilities.

1. If you pay by credit card there is implicit guarantee of satisfaction because as a customer one can stop payment. that could otherwise be a lot of money. 6. 2. 5. The best part is that you can get statement of all expenses and you can keep a track of your expenses at a glance. There are a number of innovative credit cards that help benefit the customer. There are cards that help accumulating points towards reducing the cost of your new car. 7. 3. This is quite easy as the shopping can be done on credit card and the points are accumulated that can be encased for gifts or travel. You can get cash advance anywhere at so many cash outlets. REASONS OF FEAR DURING ACCEPTANCE OF PLASTIC MONEY 8 . It helps to establish a credit history and can help in getting loan if needed. 8. 4. If a airline ticket is booked on a credit card and especially if you are going overseas. the travel insurance is covered. On internet it is the preferred option and you can also participate in on line auctions if you have good credit rating. Free airfare mileage based on point system that can take you or your family to a destination of your choice if you can accumulate points. Some cards have your picture on it that is as good as a identification paper. 9.

3. Then there is a danger of someone can get hold of your credit card number and misuse it. 2. The happy are those credit card users that pay up and take advantage of the free credit days that the credit card companies provide. Static’s are available that the domestic violence increases after the festive season in the credit card user societies when the credit card bills arrive. Some governments also take interest in the spending patterns of individuals and credit card statements make their job easier. There are a number of cases of double dipping done at your expense when paying at an outlet by credit card. Some credit cards have conditions that may put you in difficulty if you have not read the fine print. 5. RISKS IN THE BUSINESS TO THE BANKS: 9 . so there are several things to be kept in mind and people should take in using it. There is a temptation to acquire more and more cards. There are always dangers when money matters are involved but one has to live with the necessary evil. Some have more than their share of cards. 4. 6.1. So being a good creation and instrument of financial market it is risky too. Using credit card exposes one to the possibility of some companies profiling and lobbying you based on your spending pattern. They can loose track of payments and be in difficulty.

In case of loss all multinational banks and some Indian banks limit the liability of the cardholder upto Rs. Some banks carry the risk themselves and investigate the loss before determining the liability of cardholders. Lack of reliable data / infrastructure to check the credit worthiness of individuals has led to the situation where people without sufficient resources have become eligible for availing credit facilities.These account for 60% of fraud in India. Lost/Stolen Cards . Default in payments . banks have started the Photo card Option which provides the photograph of the cardholder on the card. than to pursue it throughout the litigation labyrinths. Multiple Imprints or Record of Charge (ROC) Pumping .Currently banks have huge amounts of funds blocked with willful defaulters.Banks excited at the projected 40% growth rate1 in the plastic money industry are apprehensive about the potential corresponding increase in fraud cases. 2. Some banks register upto 7% fraudulent case in a year. To combat this. 3. after trying to recover it for six months. These banks take about a month to replace the missing card. Through the Hot Card Bulletin which is continuously upgraded and sent to merchant establishments to provide them with the current status.It refers to the expedient system by which merchants make multiple charge slips instead of the relevant number when a cardholder gives in his plastic card. They are also providing information about the lost/stolen cards . These banks transfer their risks to insurance companies and generally replace the lost card within three days. 1000 (for Classic card) if card is used after lost / stolen card has been reported. 1. 1 10 . 0 (for Gold card) and Rs. The marketers in India find it more cost effective to just right-off the unpaid amount in their balance sheets. But the success of this measure is debatable.

depending upon the roll over period ( 30 / 45 days ). Visa offers its members a national merchant alert service which acquiring banks can refer to in order to check on the credentials of the merchants whose business they woo. the fraud loss is the issuer’s responsibility. his bank is liable. While a credit card offers convenience. In India.Tocombatthese problems potential card owners decide upon the mode of payment before selecting a card. Before the hot card date.1000 regardless of how much the card is used fraudulently. If a merchant is found guilty of willful fraud. This enormous database helps zero in on cardholders and locations prone to fraudulent activity.A majority of the credit card losses are skewed towards the issuer as the risk on the cards is carried by the issuer. that convenience can be expensive if the card holder is slow in paying off his outstanding dues. the prerequisites would include a card with a low or no annual fee and long grace period 11 . the issuer is entitled to ‘charge back’ the transaction to the merchants. if a merchant accepts a hot listed card. Once a card holder has informed the bank of the loss of the card.a. which most banks fix at Rs. A majority of card users utilize their maximum limit. Master Cards security and risk management team organizes regular training programs for banks and member establishments on fraud prevention. he is subject only to a minimum liability. through the acquirer. TO CARD HOLDERS: The main problem with credit card is that it is easy to get in over the head. Visa and MasterCard have a formal set of guidelines known as charge back rules. Delivering new cards to members by courier has drastically cut fraud arising from nonreceipt of cards. It also has its risk identification service which monitors every single transaction through Visa Net. the figure ranges from anywhere between 22% to 34% p. In terms of the annual percentage rate that an individual is charged towards paying off his debt. However. Credit cards charge higher interest than some of the other forms of borrowing. for the majority of people who believe in paying off their balances in full.

When the customer applies to the bank for a credit card.PARTIES INVOLVED IN CREDIT CARD BUSINESS. When one applies and is issues the card. THE CARD HOLDER. The customers then becomes a card holder and can use the credit card to purchase goods or services from a merchant. Each month the 12 . the bank issues credit card with a specified credit limit. the bank checks the credit worthiness of the customers and once the application is approved. There are five parties involved in credit card business: THE CARD ISSUER.

as well as finance charges if any. he is bound by a written agreement with the acquirer. THE ACQUIRER. restaurants. When the cardholder uses the credit card to pay for goods and services at retail shops. the establishment is a merchant. THE MERCHANT. In order for an establishment to be a merchant. THE ASSOCIATES. they have to meet the criteria set by the associates. Master card international and visa international are known as Associates. hotels. For financial institutions to be a member of Master card or Visa. 13 . airlines or any establishments that accept the credit card . There financials institutions is the acquirer. When a merchant accepts visa or mastercard as a mean of payment. They are owned or controlled by a group of member institutions.cardholder receives a bill from the card issuer for the amount the cardholder incurred with the credit card. A merchant should be of good reputation and be financially responsible. it must be accepted by a financial institution who is a member of Master card/ or visa.

capable of financing projects in any country in the world.AGE OF PLASTIC MONEY Banking has evolved a long way from the days of the medieval moneylenders counting coins on the bench to the present scenario. these banking majors are heavily dependent upon their retail home base of savers and borrowers. Still. Most of the bankers 14 . The trail starts right from the small saver leaving a few rupees in his local bank to the billions of rupee loans raised by a syndicate banks and financial institutions. where it is hard to trace the trail of money from the beginning to the end.

The history of phenomenal growth in the credit card segment traces way back to in 1950.began focusing on this retail market segment as global competition intensified in late seventies and early eighties. American Express began selling their card as a prestige to hotels. made their debut in 1981. The entire breed of new players saw a fresh opportunity of granting unsecured loans at high interest rates to those credit cardholders who did not pay their bills on time. HSBC and Citibank in the early 80s. The credit card industry got a further boost with the arrival of American Express in the arena in 1958. Between 1987 and 2001. one of the banking products that cater to the needs of retail segment has seen its number grow in geometric progression in recent years. some 50 years ago. restaurants. the time when ‘Diners Club’ was established. shops or airlines in America and slowly expanded the network across the world. With only two players in domestic card industry. the card industry has been growing with a rapid pace world over and so has been the growth in the domestic card industry. and are on the verge of an unprecedented boom. Credit cards. The success of these two players attracted many other banks to join the credit card business. 15 . the market has virtually grown to over 4 million cards with over 25-30% of compounded annual growth in new cardholder’s base. Starting from ‘Diners Club’. Credit cards in India. without which this could not have been possible. The card provided select members with credit at 22 restaurants in New York and collected a commission for paying the bills promptly. This growth has been strongly supported by the development in the field of technology. These banks were not so concerned with collecting commissions from shops but were thriving on high interest income from those who did not pay their bills on time. the number swelled to over 25 in the year 2001.

a domestic major in the banking sector. each possessing an average of 2 cards. Today the domestic card industry is flooded with different types of cards ranging from gold. SBI. silver.the list is endless. Given the lack of maturity of the domestic card industry. There are only 2 to 3 m cardholders.Its not that only the card numbers have increased. global. co-branded credit cards.. 16 . There is no doubt that the domestic card industry has to yet to mature and offers significant long-term growth potential. This is also evident from the fact that the market share of these foreign banks is estimated to be well over 70%. The new private sector banks would have the opportunity to capture significant market share by combining the strengths of foreign banks and nationalized bank like SBI. There is immense growth potential in the domestic card industry. its growth will depend upon building core retail business. with more sophisticated products. but even the types of cards on offer have seen a surge. SBI. A glance at the Indian population reveals that India’s middle/upper middle class (target segment) represents a population of over 10 m. This is a very low figure given India’s huge middle to upper class population. Foreign banks have shouldered the major responsibility of increasing the card base and adding value-added services to the card products in the past. other nationalized banks and the new domestic private sector banks are expected to play important role with complementary strategies. In the expansion of domestic credit card market. More and more nationalized banks and private sector banks like ICICI and HDFC Bank are aggressively launching credit card with value added features. Foreign banks with the advantage of technology and industry experience are expected to concentrate on increasing card spending and customer loyalty in the major cities. on the other hand is expected to capitalize its superior distribution network to expand card acceptance in the smaller towns. the existing foreign players. But the scenario has changed dramatically in the last of couple of years with the entry of State Bank of India (SBI). smart to secure.

A recent American Express `Share of Wallet' study among cardholders across the six cities of Delhi. New Zealand. The efforts of these banks to increase the card base is going to be wholeheartedly supported by the residents of these smaller cities with their higher disposable income. this has spurred American Express to tie up with the Delhi Public group of schools to facilitate parents to pay by card. increasing travel and the growth in the entertainment sector. changing lifestyle. Right now. Indian consumers are increasingly using the plastic alternative for everyday spends such as petrol. The result of the Indian survey is in line with the other markets in the Asia Pacific region that were surveyed. In fact. hotels and car rentals. They would be better off. Malaysia. Cardholders in countries such as Singapore. 17 . home furnishing and good old eating. penetrating into smaller cities and bringing credit card to the masses rather than cannibalizing other foreign banks’ existing cardholder base. owing to their vast network and reach to smaller cities. Kolkata. can easily tap this potential. hospitals.Although at present the card market is mainly limited to India’s relatively bigger cities and tourist locations only. Mumbai. Chennai. The age of plastic money seems to be here to stay. Bangalore and Hyderabad reveals that card usage is highest for dining and shopping. The survey indicates that consumers in the country are increasingly looking to use credit cards to pay school dues for their kids. India is at a low 11 per cent in comparison to other countries in the Asia-Pacific region when it comes to using plastic money for recurring bills such as utilities. telephone services. Domestic banks. While travel and entertainment-related expenses continue to be "big ticket" expenditure items. Thailand. while it is also popular for travel-related expenses such as air tickets. Hong Kong and Australia spend 10-30 per cent more on the same services. there is also a potential in smaller cities.

there are about 30. However. Nepal to Mexico. The use of corporate cards can bring savings up to 40 per cent for the middle market companies through process savings and purchase savings. According to the wallet study. Taiwan at 31 per cent. the total billings on cards are estimated at over Rs 10. According to American Express. Australia began printing plastic notes in 1988. both even higher than Hong Kong and Australia. in the developed markets of Australia. The credit card market in India. the population is at a whopping nine million today. Singapore. is growing at 20-25 per cent per annum. Interestingly.7 billion. Also. 39 per cent consumers in Thailand also anticipated increased card spends while about 19 per cent expected to acquire more credit cards in the next six months. But corporate cards continue to have good potential. with sales revenues from Rs 5 crore to Rs 500 crore incurring a total travel and entertainment expenditure is $2. and now Singapore. Hong Kong and New Zealand. ‘‘but the name is confidential. Malaysia tops at 42 per cent. This expense in India is expected to grow at the rate of 8 per cent and is estimated to exceed $5 billion by year 2006. About 32 per cent of the consumers surveyed anticipate using the card more frequently in the next six months. obviously due to saturation. In this category.’’ said a Securency official. ‘‘A 24th country has just signed on.subscriptions and insurance.” 18 . the number of credit cards are expected to remain the same. Since then Securency has spread its ambit to 23 countries—Bangladesh to Vietnam.000 crore. growing at 20 per cent per annum. according to American Express. the frequency of card usage is expected to go up in the forthcoming months.000 mid-market companies in India. From the half-a-million cardholders in 1992. while 18 per cent said that they would add more credit cards to their wallets.

’’ In India. These things take time. Securency’s experience with polymer suggests a life of almost four years. pointing out that polymer notes did not get dirty. it is longevity that is emphasised. were never rejected by teller machines—and were a huge cost saver. Sample Rs 10 and Rs 100 polymer notes were produced but the idea was perhaps still too novel. ‘‘they are more durable and difficult to counterfeit. Indian officials said: ‘‘the polymer technology is good but no final decision has been taken.5 to two times more than paper notes.’’ said Curtis. Against a counterfeit rate of 68 per million for notes in Europe and 100 per million in the US. Just do the calculation.Securency prints its notes on a polymer substrate called Guardian. Australia has only nine counterfeit notes per million. usually survives six months. Curtis was evasive. ‘‘a Brazilian government study in 2003 calculated that in three years they had saved the central bank $17 million. issued in April 2000 and roughly analogous to India’s Rs 10 note.’’ 19 . ‘‘May be between $2550 million. where the velocity of money—the number of times it changes hands—is high. Securency’s tentative offer to India includes a joint venture ‘‘with an Indian entity of the government’s choice’’ to produce the polymer substrate locally. ‘‘There are 250 million 10 reais polymer notes in circulation. Aus $50 notes issued in 1995 are still going strong. ‘‘While polymer notes cost 1. Securency presented its case afresh. such as the Rs 10 note. Low-denomination paper currency. Securency first spoke to RBI in 1999. About nine months ago. Asked what sort of an investment by Securency this would entail.’’ India issues seven billion Rs 10 notes a year. tear or crumple.’’ On their part. The Australian firm quoted the example of Brazil’s 10 reais polymer notes.’’ said a Securency official. As for higher denominations. which it has patented.

eldest of the Giori brothers and company chairman. In 2001. supplied to the Federal Reserve by a family-run firm for the past 125 years. they’re betting their polymer on it 20 . it bought machines from Japan’s Komori for the RBI’s new presses. India diversified. is one of America’s wealthiest men. Crane and Company patented this paper in 1879. M Roberto Giori. As PM. agreeing to supply paper worth $336 million. even if few have heard of him. That decision was taken when Manmohan Singh was finance minister. run by the Swiss family Giori and till recently said to control 90 per cent of the banknote printing business. a German firm. it signed a four-year contract with the Treasury. The Giori saga has an unfortunate Indian subtext. Change is unusual. In 2003. 75 per cent cotton and 25 per cent linen. will he take the next leap to plastic? At Securency. For 50 years. Based in Dalton. In the US—seen by some as ‘‘the final frontier for polymer notes’’—the dollar is printed on special paper. insiders say. Turning away from De La Rue Giori. In the 1990s. Lansing E Crane. free India printed its rupees on machines bought from De La Rue Giori. he sold his business to Koenig & Bauer. If the Taliban had figured out who this economy class passenger was. Massachussetts. The company’s chairman. In December 1999. was among those hijacked to Kandahar. he would have been the uber hostage. The banknote industry has conservatism and secrecy written all over it. Giori never recovered.Delay would appear perfectly explicable.

the pioneer of today’s multibillion dollar plastic money business. As McNamara stepped out of the restaurant he had the brainwave for the introduction of credit cards . a New York businessman took his friends out to dinner. and by 1959 by Carte Blanche.The next great leap-forward came from Bank of America. the proprietor was kind enough to allow him a later settlement of bill. It was followed by American Express which is now a dominant force in the Travel and Entertainment cards industry. McNamara. In the present time American Express leads the travel and entertainment (T&E) card industry. The story goes that Mr. after many vicissitudes is now a part of Citi Bank Empire Together With Diners Club. Diners Club vetted its members for credit worthiness and guaranteed payment to participating establishment.system of availing instant credit upon confirming the identity of card holder. Not only did these establishments pay a commission on member’s purchases but the members also paid an annual subscription fee. Diners club adopted a promising approach by recruiting various Hotels and restaurants to act as member establishment for accepting the cards. Thus was born the Diners Club Cards. Such card holders could use their card 1966 offered to 21 . which in other banks. Thus was born the first ‘Travel and Entertainment Card’.ORIGIN OF CREDIT CARDS The credit card has its beginning in an embarrassing incident that took place in the early 1950’s in America. The end of meal he discovered that he had forgotten his wallet at home.

and soon. In the 1980s credit card concept was launched in India through the Diners Club card. later renamed Master Charge and later still Master Card. or some equivalent. Later in 1977 all the national and international Bank America licenses were pulled together under the single name of Visa. The members agreed to pay the club to obtain the card and then agreed to pay each monthly billing as it came in 22 . In 1950. This plan involved a agreement between the club and the merchants. introduced the first independent credit card plan. Now both are feeling the advance of credit card. In this age of rapid technological advances it is only natural that man should seek out a new and more efficient system of carrying on trade and commerce. They. HISTORY OF CREDIT CARDS Since the beginning of history man has been involved with trade and commerce. Not to be outdone. This system seems to be credit card. Some time before1920 some large department stores began to issue "credit coins". different medium of exchange has been developed. white and gold Bank America card to at any accepting merchant establishments around the globe. a rival group of American Banks came together in 1966 under the name of Interbank. and money in turn has faced the advance of checks. have existed since the early part of this century. the Diners club. These coins were issued to good customers and allowed them to purchase merchandise on credit in the store. Again. Barter gave way to the advance of money. within a couple of months both Visa and Master card entered into the Indian market. As this area has expanded and become more important.license its successful blue. These coins were a small piece of metal which displayed the name of the merchant and the series of merchant identifying the customers account. Ever since Master Card and Visa and their affiliates have carved the world credit card market. credit cards are not new.

the Midwest bank card system was started. The merchant agreed to honor the card and then forward his credit voucher to Diners club for payment once a month. Today more than 60 million credit card accounts exist in the United States. however. and seven out of ten households possess at least one credit card. until the late 1950s when the bank of America and the Chase Manhattan bank issued there cards. the first National bank of long island became the first bank to offer its customers a credit card plan. The member there by were able to get service from many type of establishments by carrying only one card and were able to pay for it at the end of the month. In 1966. The merchant on the other hand. were relieved of having to have his own plan and was also likely to increase the volume of his business since card holding members would find it more convenient to deal with him then with a merchant who wouldn't honor is card. By 1986 out standings balance on credit card account total more than $80 billion 23 . while Hilton Credit Corporation initiated the "carte blanche" plan the following year. In 1951. This area was not very important. By at least the beginnings of the 1970s the personal credit card had become a fixture in the nation’s economy.. The success of Diners club pan was such that the American Express company entered the field in 1958.

which ranges depending upon the type of card one possesses.An agreement to lend a specific amount to a borrower and to allow that amount to be borrowed again once it has been repaid. Credit Card – A credit card is a financial instrument. retail stores and other businesses generally issue these.SOME TERMINOLOGY USED IN CONCERN WITH CREDIT CARDS Before we go any further. Banks usually take an initial fixed amount in the first year and then a lower amount as yearly renewal fees. Most credit cards offer revolving credit. 24 . Credit limit – The maximum amount of charges a cardholder may apply to the account. Annual fee – A bank charge for use of a credit card levied each year. Revolving Line Of Credit . which can be used more than once to borrow money or buy products and services on credit. why not become familiar with the various terms and jargons used by the credit card industry. Banks.

some cards require a number to be punched into a keypad before a transaction can be completed. TYPES OF CARDS MasterCard – MasterCard is a product of MasterCard International and along with VISA are distributed by financial institutions around the world.Personal Identification Number (PIN) .As a security measure.000 financial institutions in 220 countries and territories. The number can usually be changed by the cardholder. 25 .2 million locations. incomes and credit reports. whose users spent $650 billion in more than 16. Joint Credit . It generally results in a higher credit limit. it is the below-market interest rate offered to entice customers to switch credit cards. but makes both parties responsible for repaying the debt. A VISA cardholder borrows money against a credit line and repays the money with interest if the balance is carried over from month to month in a revolving line of credit.Issued to a couple based on both of their assets. Its products are issued by 23. Cardholders borrow money against a line of credit and pay it back with interest if the balance is carried over from month to month. Teaser Rate .Often called the introductory rate. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards. it had almost 700 million cards in circulation. VISA Card – VISA cards is a product of VISA USA and along with MasterCard is distributed by financial institutions around the world. In 1998.

Affinity Cards - A card offered by two organizations, one a lending institution, the
other a non-financial group. Schools, non-profit groups, pro wrestlers, popular singers and airlines are among those featured on affinity cards. Usually, use of the card entitles holders to special discounts or deals from the non-financial group.

Standard Card– It is the most basic card (sans all frills) offered by issuers. Classic Card–
Brand name for the standard card issued by VISA.

Gold Card/Executive Card–
perks or incentives to cardholders.

A credit card that offers a higher line of credit

than a standard card. Income eligibility is also higher. In addition, issuers provide extra

Platinum Card – A credit card with a higher limit and additional perks than a gold

Titanium Card

– A card with an even higher limit than a platinum card.

Secured Card – A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.

Smart Card –

Smart cards, sometimes called chip cards, contain a computer chip

embedded in the plastic. Where a typical credit card's magnetic stripe can hold only a few dozen characters, smart cards are now available with 16K of memory. When read by a special terminals, the cards can perform a number of functions or access data stored in the chip. These cards can be used as cash cards or as credit cards with a preset credit limit, or used as ID cards with stored-in passwords.


Charge Card – Falls between a debit and credit card. Works like the latter and you
don't have to be an accountholder. Just pay up in full when the bill arrives with the mail. No outstanding are allowed, in other words, no revolving credit facility either. American Express and Diners are providers.

Rebate Card –

This is a card that allows the customer to accumulate cash,

merchandise or services based on card usage.

Co-Branded Card –

This is a marriage of convenience between two service

providers who want a trade-off with the other's strengths. Specific facilities are made to members through these tie-ups. So, Times Bank and Citibank have a co-branded card that allows concessional rates for add-on cards or telephone banking. Stan chart and Hindustan Lever Limited have a co-branded card to sell Aviance beauty products. SBIGE Capital has a co-branded card for retail loans.

Cash Card –

Cash cards, similar to pre-paid phone cards, contain a set amount of

value, which can be read by a special cash card reader. Participating retailers will use the reader to debit the card in increments until the value is gone. The cards are like cash -- they have no built-in security, so if lost or stolen, they can be used by anyone.

Travel Card –

These work mostly as debit cards for the limited purpose of travel.

Citibank Dollar Card, American Express, Bobcard Global and Hongbank Bank Thomas Cook International Card are among the players in this section.



Following methodology is used for credit card business:
Credit Card bank advertises or approaches the prospective cardholder. Prospective card holders apply for credit card membership by filling the prescribed form which normally contains personal and financial particulars. Issuer of credit card evaluates the form and issues the credit card and fixes the money limit for use of such credit card. Cardholder puts the signature on the prescribed place on the card before putting it to use and starts using it. Member establishment prepares a charge slip (for cost to be recovered) gets it signed by the card holder, tallies the signature, and return, on the copy of charge slip of charge slip to the credit card holder. The second copy is sent to the issuer for recovery of money and he retains third copy. Card issuer receives the bill and charge slip and makes payment to the member establishment. 28



While some of them are offering attractive interest rates. others are luring customers by their reward schemes. 31 . issuers have begun highlighting the value added features offered along with the basic product.CARD HOW TO CHOOSE A CREDIT CARD With the credit card truly becoming an international citizen. However. a comparison on the basis of a few basic parameters is will help us make an informed choice. With a plethora of choices on offer it is not easy to come to a decide on any particular card.

on the other hand.. for e. for e. Even within a particular type of card. Amex (once the bank is informed about the loss) and the Stanchart photo card. all others will mail a replacement card to the holder's mailing address. some banks like Citibank and American Express have cards which have no set credit limit. Citibank. Amex. for e. Citibank awards one point on spending Rs100.5% on domestic air fares and 6. If one is travelling and has lost his/her credit card then reporting the loss will not be much of a problem. the non-photo card carries a liability of Rs1. Liability for a lost card is nil for Citibank. 32 . A minimum of 350 points is needed to get a discount on the annual fee.g. offers discounts of 3. only allows points collected to be squared against a discount on the annual fees.5% on international ones if tickets are charged to their cards.First. However. on the gross income of the individual and the period for which he/she is using the card.g. has a charge card which has no upper limit and allows one to spend as much as one likes (provided the holder repays the amount at one go). HSBC. These include airline ticket booking and insurance benefits on lost luggage and accidental deaths. Amex will replace the card within 48 hours free of cost. HSBC. Stanchart and Amex can be reached from any corner of the world for information on one's card as well as for reporting the loss. The latest in line of value added features are the rewards programs. All banks have different limits set for customers depending upon the type of card in their possession.g. among other things.. HSBC. However.. almost all cards come with various goodies attached. A second criteria could be the lost card liability. Here a card holder earns a certain number of points by spending a particular sum of money. uses a conversion of Rs125 (spent in India) or Rs80 (spent abroad) for one point.000. Nowadays. However. Stanchart.The table below gives an indication of the various value added services on offer from various banks. HSBC. except for Amex. there's the credit limit. limits may vary depending upon the credit worthiness of the individual. This depends.

Companies like Indian Oil Corporation have tied up with Citi bank to launch Indian Oil Citibank card. called Balance Transfer Service. The card holder gets a 5% discount on all AMCO and Exide make batteries from authorized dealers and Rs1.000 in the preceding 12 months. Amex will pay the card issuer and transfer the amount due to the Amex card.99% per month as compared to 2.000 off at select outlets for MRF auto coat car painting charges. Amex has a scheme for waiving the annual fees if the cardholder spends more than Rs45. There is also the Times card and Bharat Petroleum BOB card.Value Added Features Hotel discounts Travel fare discounts Free global calling card Lost baggage insurance Accident insurance Insurance on goods purchased Waiver of payment in case of accidental death Citibank Yes Yes (G) Yes Yes Yes - Stanchart Yes Yes Yes Yes - HSBC Yes Yes Yes Yes Yes Yes* Amex Yes Yes Yes - An innovative scheme offered by American Express. helps the cardholder to pay off out standings on other credit cards. And for the first six months the Amex card holder gets the benefit of a lower interest rate of 1. Several of them have been have been launched recently. 33 . These cards give you discounts at several outlets. For example the Mahindra Stan chart card gives you priority check-in and checkout facilities at Guest line hotels (run by Mahindras). For frequent users. With this card one does not require to pay a transaction fee for purchasing petrol at any Indian Oil outlet.95% for most other banks. Another new thing on the horizon are the so-called co-branded cards.

introduction of the Driver's Edge and Sony Citibank cards. Growth has continued through the acquisition of the AT&T Universal Card Services business. and expansion of the Citibank-American Airlines partnership. Citibank has more than 70 million card member accounts worldwide. 34 . The merger adds more than one million credit card accounts.DIFFERENT TYPES OF CREDIT CARDS BY DIFFERENT BANKS As the undisputed leader in the Cards business. including Salomon Smith Barney clients. principally with members of professional associations and other affinity groups.

11 percent in Argentina and Chile. and more than 20 percent in Hong Kong and Taiwan. Asia. Acquisition of the AT&T Universal Card increased our market share of total U. where Citibank launched a card in late 1997. Citibank has 25 million cards. Central and Eastern Europe. including affiliates. In the United States.S. we have 20. Citibank is strongly committed to maintaining Cards as one of the great success stories of the bank.The Citibank Advantage card. In Poland. and the Middle East. card receivables from 11 percent to 15 percent. In most of these markets we have double-digit share: 43 percent in Puerto Rico. 35 . in force in Latin America. now in 25 countries.0000 card holders today. is the most successful co-branded card in the industry.

Andhra bank et. you’re spending and payment patters and personal resources determine how much you can charge. . over time. 80000 crore. The size of the credit card market was around 300. Unlike other Card.while traveling abroad.30 laky.000/. wherever you are in the world. Baggage Insurance Baggage Insurance protects your baggage against theft or loss for upto Rs.000business establishments in the country now accept credit cards. Club Assurance As a Diners Club Member.000 in 1990. More than 40. 40. The total credit they provided in 2004. Credit Card was a status symbol for upscale individuals who had high travel and entertainment needs. you are insured against loss of life in an air accident for Rs. with Visa and Master Card affiliations.and 000/. The early eighties saw the launch of credit cards in India by some Indian banks. 1. This insurance is available to you. just after 10 years it was launched in the market of United States. So.000/. At Diners Club. Central bank. Club Protection Household Insurance this cover protects household articles (excluding jeweler and valuables) for a value of upto Rs.00. FEATURES OF THE CARD Your lifestyle demands complete financial flexibility and convenience.2 laky in any other accident. This insurance is on first loss basis that insures articles for the entire sum insured. 60. It was the firs charge card in the world. viz. Launched in 1960.05 was Rs. you set your own limit.in India and upto Rs.per annum. the Diners Club Card does not restrict you with a pre-set spending limit. 36 . or Rs.CITIBANK CREDIT CARDS DINERS CLUB CREDIT CARD Diners Club was the first card in the Indian market.

50. which means you can encash them whenever you want. you can claim upto Rs.100 spent on the Diners Club Card. Moreover.when abroad.Delayed Baggage If your baggage is not delivered within 12 hours of arrival of a flight.in India and Rs. For every Rs. these Points are 'evergreen'. Loss of Passport/Ticket If you lose your passport in a foreign country. India's No. Besides Diners Club has tied up with Flying Returns.5. Which means you can now redeem your Points for free miles! 37 .000/. you also get the most powerful rewards program in the country.5. and if there is no alternative flight within 6 hours (of actual arrival time) or the airline do not provide accommodation. You can redeem the Rewards Points you have earned for fabulous travel packages and delightful gifts. you will be reimbursed for purchase of essential clothing of upto Rs.with Fast Track option With Diners Club Card. from the time of purchase up to a value of Rs. you earn one Club Rewards Point.1 frequent flyer program from Indian Airlines and Air India. for a period of 180 days.towards the cost of obtaining a fresh Passport.15. 10. you will be entitled to Rs.000 reimbursement for hotel accommodation. If you lose your air tickets you will be reimbursed for it upto Rs.000/Purchase Protection Under International Purchase Protection. purchases on your card are insured against loss or damage due to fire or theft.000/Club Rewards .25. Delayed Flight If you miss an onward flight due to late arrival of an incoming flight.000/.000/.

Club Cash The Diners Club Card gives you the convenience of drawing cash in an emergency. the international calling card which enables you to call from 60 countries to over 300 countries whenever you travel overseas. designed exclusively for Diners Club Members. All you have to do is charge your bill to your Diners Club Card every time you visit any of these places. Chennai and Bangalore. car rentals and retails across the country. This facility is available absolutely free. you have complimentary access to airport lounges located at the domestic departure areas in Mumbai. 24 hours a day.Finally. There are more than 74 such lounges located at various international airports. Club Perks Club Perks is a unique promotional offer exclusively for Diners Club Members. In India. Club Lounges Relax between flights. your Club Rewards Points can also be converted to Oberoi Top Points and Welcome Award Stars .000 through Club Cash through our extensive network of Automated Teller Machines. and pay later in Indian Rupees through your Diners Club Card. You can now relax in plush airport lounges. New Delhi. Global One Calling Card Finally. Club Privileges-Phone Home.the rewards programs of the Oberoi Group and Welcome group respectively. It also gives you complimentary into some of the most prestigious discotheques in the country. Citibank international gold card High Credit Limit 38 .20. Diners Club offers you an exclusive range of international privileges. Club Perks gives you special discounts at your favorite restaurants. hotels. The GlobalOne Calling Card. 7 days a week! You can access up to Rs.

The best part is this Card is yours at no additional cost. FreePassportLossInsurance If you lose your passport in a foreign country. FreeGlobalPurchaseProtection Under International Purchase Protection.000/.25. and comes with the advantage of spending in International currencies and paying back in Indian Rupees! Comprehensive Insurance Benefits * PersonalAccidentInsuranceuptoRs.5000/-.000/in India and up to Rs.000/. Free Baggage Insurance This unique insurance protects your baggage against theft or loss for up to Rs. purchases on the Card are insured against 39 . A true reflection of your power.20lakh) Free House hold Insurance This cover protects household articles (excluding jewelry and valuables) for a value of up to Rs.15. your Card comes with FREE Personal Accident Insurance (uptoRs. only the most powerful Card in the world will do . 60.75.the Citibank International Gold Card. you will be reimbursed for up toRs.For someone as powerful as you. you will be entitled to Rs. you can claim up to Rs.000/.as reimbursement for hotel accommodation.while traveling abroad.per year. Free Delayed Flight Insurance If you miss an onward flight due to late arrival of an incoming flight.000/. 40.20lakh Whether you are traveling in India or overseas. and if there is no Alternative flight within 6 hours (of actual arrival time) or the Airlines does not provide accommodation.towards cost of obtaining a fresh passport. this Card gives you the ultimate financial freedom in India and everywhere in the world. This is valid for primary Card members only. On loss of an air ticket.

The Global one Calling Card charges will be conveniently billed later to your Citibank International Gold Card and itemized call details will appear on your monthly statement. What's more. You can exchange your Citibank Rewards Points for miles on airline frequent flyer programs and fly free to your dream destination and stay free at hotel properties participating in our Rewards Program. free Hotel Nights. 40. 40 . Revolving Credit Facility With Citibank's powerful Revolving Credit Facility you can choose to buy high-value items now and pay later in parts. you do not need to use precious foreign exchange or hunt for loose change. The Global One Calling Card makes international calling absolutely easy. Every time you use your Card you earn Citibank Rewards Points that can be exchanged for many exclusive privileges like Free Air Miles.loss or damage due to fire or theft for a period of 180 days from the time of purchase for a value of upto Rs. Unique reward program. And pay as little as 5% of your total outstanding every month. In fact your tickets will be delivered to you at no extra cost. You can also choose to pay your Card Renewal Fee (in part or full) using your Rewards Points as well. Free GlobalOne Calling Card The next time you make an international call from overseas.5% off on basic domestic air fares and 7% off on basic International air fares when you buy tickets on your Citibank International Gold Card. leather accessories and much more. Special Discounts on Travel India's leading travel management company Travel House (a member of the ITC Group) brings you 3. your Citibank Rewards Points are evergreen and never lapse.000/-.

Exciting gifts with Citibank Rewards Every time you use your Card. Citibank silver card. You can also draw cash from any Citibank branch.1000/. Choose from a wide range of gifts . Call our courteous CitiPhone Officers standing by to assist you. over 18 years of age. Bangalore. Your Citibank International Gold Card Membership entitles you to Additional Cards for two members of your family. requesting for an emergency Card replacement or for emergency Cash Advances. while you are overseas. Additional Card You can share the power of your Citibank International Gold Card with your family. Delhi. A wide range of miscellaneous information is also available for your benefit. From the minute you dial in. There are 24-Hour ATMs in Ahmedabad.hour ATMs While travelling overseas you can access cash (up to 60%**** of your Credit Limit) at over 12. at a special price of Rs. per Card. 24.hour CitiPhone CitiPhone. 24 hours a day. and 7 days a week. Chennai. you earn valuable Citibank Rewards Points that can be exchanged for fabulous gifts.000 Visa/MasterCard ATMs across the globe. 41 . Calcutta.50.p.cosmetics to cameras.a. the revolutionary phone banking service ensures that Citibank is just a phone call away from you. 24. you can use FREE Phone Home Facility. Worldwide Assistance The Visa/MasterCard Global Assistance Services can be used for reporting lost or stolen Cards. Mumbai and Pune too. Hyderabad. the world-class Interactive Voice Response (IVR) Service will guide you right through.Free Phone Home facility In case of an emergency or for any urgent clarification on your Card.

COMPETITION IN CREDIT CARD BUSINESS With the emergence of plastic money (credit cards) as a social security tool and the modest way to come under transactions with time saving the customers are widely looking and accepting credit cards for their transactions. You can also exchange your Citibank Rewards Points to pay your Card Renewal Fee (in part or full). is gaining its market and competency. What's more your Citibank Rewards Points are evergreen and never lapse. No doubt due to several advantages of it.CDs to wallets. Due to wide acceptance in the market every institution in financial market whether it public sector or private sector 42 .

the Government of India and representatives of Indian industry. They have good strategies and workforce with many reputed direct sales associates and direct sales teams to fetch good sales and to win the consumers faith. CITI BANK. Every banking company is ready to serve with better schemes. SBI. INTRODUCTION OF ICICI BANK 1995: The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank.institution are engaged in this discipline with better customer focused strategy to capture the untapped market soon. rates. To be an active player of the financial market every institution is issuing several types of cards like the life time free cards with extended date to pay the amount back to the banks. PNBwith the multinational banks like HSBC. IDBI and STANDARD CHARTERED are engaged and competing for the market capitalization. The government of India is also taking initiative to protect the consumer rights in this credit cards division. So this market is now a days a global market which is gaining its growth like anything. terms and conditions which can suit the customers’ requirements. with the objective of creating a development financial institution for providing 43 . Banks like ICICI. HDFC.

ICICI emerges as the major source of foreign currency loans to Indian industry. Parekh appointed as the third Chairman of ICICI. H. 1969 : First two regional offices in Calcutta and Madras were opened. the first loan by CDC for financing projects in India. 1960: ICICI building at 163. 1987 : ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth Development Corporation (CDC). First public issue by an Indian entity in the Swiss Capital Markets. (CRISIL) India's first professional credit rating agency. (SCICI) : The Corporation made a public issue of Swiss Franc 75 million in Switzerland.5%. 1982: Becomes the first ever Indian borrower to raise European Currency Units. 1988 : ICICI promotes TDICI . 1996 : ICICI becomes the first company in the Indian financial sector to raise GDR. Backbay Reclamation was inaugurated. Mr. 1985 : Mr. 1986 : ICICI first Indian Institution to receive ADB Loans.India's first venture capital company. 1994 : ICICI sets up ICICI Bank. A. : Mr. Managed its first equity public issue 1978: Mr. Ramaswami Mudaliar elected as the first Chairman of ICICI Limited. ICICI also among the first Indian companies to raise funds from International markets. : ICICI along with UTI sets up Credit Rating Information Services of India Limited.N. 1993 : ICICI sets-up ICICI Securities and Finance Company Limited in joint venture with J. P. L. James Raj appointed as the fourth Chairman of ICICI. : ICICI sets up ICICI Asset Management Company.6 crore. Nadkarni appointed as the sixth Chairman of ICICI. 1958: Mr. 1967 : ICICI made its first debenture issue for Rs. G. 1972 : Second entity in India to set-up merchant banking services. Mehta was appointed the 2nd Chairman of ICICI Ltd. which was oversubscribed. 1984 : Mr. S. Besides funding from the World Bank and other multi-lateral agencies. : ICICI announces merger with SCICI. Morgan.Vaghul appointed as the seventh Chairman and Managing Director of ICICI. Siddharth Mehta appointed as the fifth Chairman of ICICI. 1956: ICICI declared its first Dividend at 3. : ICICI commences leasing business. T.medium-term and long-term project financing to Indian businesses. 1979: Mr. 1977: ICICI sponsors the formation of Housing Development Finance Corporation. 1961: The first West German loan of DM 5 million from Kredianstalt was obtained by ICICI. : ICICI promotes Shipping Credit and Investment Company of India Limited. the first public issue by any Indian equity in the Swiss Capital Market. 1997 : ICICI was the first intermediary to move away from single prime rate to three-tier prime rates structure and introduced yield44 .

house loans and loans for consumer durables. OVERVIEW ICICI Bank is India's second-largest bank with total assets of about Rs. United Arab Emirates and Bangladesh. 1. : ICICI announces takeover of Anagram Finance. : Merger of ICICI Limited. 1998+ : Introduced the new logo symbolizing a common corporate identity for the ICICI Group. ICICI Bank has a network of about 505 branches and extension counters and about 1. Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).curve based pricing. 2004 and profit after tax of Rs. life and non-life insurance. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. 2002 : Moodys' assign higher than sovereign rating to ICICI. ICICI Capital Services Ltd and ICICI Personal Financial Services Limited with ICICI Bank. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domestic banking strengths to offer products internationally. : ICICI Bank announces merger with Bank of Madura. : The name "The Industrial Credit and Investment Corporation of India Limited " was changed to "ICICI Limited". As required by the stock exchanges. 45 . 2000: ICICI Bank becomes the first commercial bank from India to list its stock on NYSE. branches in Singapore and Bahrain and representative offices in the United States. China. 1999 : ICICI launches retail finance . ICICI Bank currently has subsidiaries in the United Kingdom and Canada.car loans. 2004 (Rs. ICICI Bank's equity shares are listed in India on the Stock Exchange.850 ATMs.391 crore in the nine months ended December 31. venture capital and asset management. 1.214 crore at December 31. : ICICI becomes the first Indian Company to list on the NYSE through an issue of American Depositary Shares. 2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank. : ICICI announces takeover of ITC Classic Finance. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking.146.637 crore in fiscal 2004).

the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities. greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. 2004. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998. ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. and was its wholly-owned subsidiary. higher market share in various business segments. In the 1990s. particularly fee-based services. ICICI was formed in 1955 at the initiative of the World Bank. an Indian financial institution.At October 31. with free float market capitalization* of about Rs. seamless access to ICICI's strong corporate relationships built up over five decades. and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. In October 2001. 220. ICICI Bank was originally promoted in 1994 by ICICI Limited. entry into new business segments. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000. ICICI Bank. and would create the optimal legal structure for the ICICI group's universal banking strategy.00 billion (US$ 5. and access to the vast talent pool of ICICI and its subsidiaries. both directly and through a number of subsidiaries and affiliates like ICICI Bank.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges. the Government of India and representatives of Indian industry. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry. In 1999. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits. ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services. the Boards 46 . and the move towards universal banking.

the ICICI group's financing and banking operations. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. have been integrated in a single entity. Consequent to the merger. with ICICI Bank. Publish research related to innovations and significant problems within the identified thematic areas. articles or other resources. *Free float holding excludes all promoter holdings. both wholesale and retail.of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its whollyowned retail finance subsidiaries. Interactive features include discussion boards and facilities to post papers. and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. SOCIAL INITIATIVES Bring together participants in the development process to widen and deepen the discourse informing development practice. by the High Court of Gujarat at Ahmedabad in March 2002. Enable online application for funding. strategic investments and cross holdings among public sector entities. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. Address for Correspondence: Social Initiatives Group ICICI Bank Towers ICICI Bank Ltd Bandra Kurla Complex Mumbai 400 051 Phone no:+91 22 2653 1414 Fax no:+91 22 2653 1164 47 .

Aneesa Arur and Shilpa Deshpande (2002). ICICIsocialinitiatives.org. Amit Singhal and Bikram Duggal (2002).Major area of social initlatives  Mission Statement  Strategy  Focus Areas  Related Interests  ICICI Bank and the Social Sector  Publications 1.org Abstract: This paper traces the relationships between the provision of financial services to the poor and their ability to participate in the larger economy. Elementary Education in India. The paper outlines the role of microfinancial services in enabling mobility along this continuum. icicisocialinitiatives.In the paper. http://203. Bindu Ananth and Kartikeya Saboo (2002). Micro Finance: Building the Capacities of the Poor to Participate in the Larger Economy. 2.org. Bikram Duggal.org Abstract: The paper articulates the key issues in extending banking to the rural and poor populations in the country and provides recommendations for the Reserve Bank of India and the Government of India in order to resolve some of the issues. ICICIsocialinitiatives. 4. Tara Beteille (2002).111/icicisig/Microfinance/upload/MFS DI2(2). banking has been viewed as consisting of two elements: cash management and 48 . Working Paper Series.32. Working Paper Series. Infant Health at Birth.199.doc3. Extending Banking to the Poor in India. icicisocialinitiatives. Poor households progress from a stage of securing themselves from the day-to-day risks they face to establishing and enhancing their livelihoods.

Section III provides an overview of the various micro financial services (insurance. Section I reiterates the crucial role of micro finance in reducing vulnerability and enhancing the prospects of growth for poor households. ICICIsocialinitiatives. 5. elementary education and micro financial services define the areas in which the SIG’s work focuses.  Mission Statement The mission statement of the SIG is "to identify and support initiatives designed to improve the capacities of the poorest of the poor to participate in the larger economy". Within these broad areas. icicisocialinitiatives.org. infant health at birth. 6.management of databases. Bindu Ananth and Soju Annie George (2003). The SIG believes that the three fundamental capacities any individual should possess to be able to participate in the larger economy are in the areas of health. savings and investment. Emerging Perspectives in Corporate Social Responsibility. Section II examines the broad challenges in micro finance. the paper highlights some of the regulatory issues that impede the progress of banking along the lines suggested. Section IV examines the issues specific to Micro Finance Institutions (MFI) in India and Section V concludes the paper by identifying the key areas for further research and debate. They should enable them to become active and informed 49 .org Abstract:This paper attempts to examine specific issues in the delivery of micro financial services and outlines some new approaches towards scaling up. Bindu Ananth (2002). Scaling up Micro Financial Services: An Overview of Challenges and Opportunities. education and access to basic financial services.  Strategy At a very basic level. the programmes and projects supported by the SIG are required to cater to the poorest. Given this perspective. credit and other risk management instruments).

the SIG tends to support reasonably large-sized initiatives so that issues such as cost-effectiveness. Consequentially. KEM. The initiatives also need to be cost-effective. in the near and long term. will influence the outcome. Cost-effectiveness also facilitates the adoption of the initiative in other contexts. it should be possible to take away significant lessons from it in order to enrich work in other settings. serious and regular impact analysis can only make the programme richer and is essential. Scalability implies the ability to draw upon important elements of a programme and adapt them to suit the needs of a specific situation. These initiatives not only have the potential to provide key research inputs to other programmes. in its research work and impact assessment. The initiative must be scalable. However. with a focus on producing measurable outcomes that meet a minimum quality requirement. Even if the programme itself is not directly scaleable. very often beyond the control of the programme/ organization.participants in socio-economic processes as opposed to passive observers. It is critical to clearly understand how an initiative is performing in terms of its predetermined goals and in comparison to alternatives. It often works in partnership with academic institutions such as Institute of Rural Management Anand. The approach of the SIG may thus be characterized more broadly as ‘action research’. These initiatives must be output oriented. it is important that the impact of these programmes. to distinguish it from pure academic research. be carefully understood and analyzed in a rigorous manner and not through anecdotes. scalability and impact assessment can be dealt with more directly. This is in recognition of the fact that resources are limited and their efficient use is imperative if the maximum number is to benefit. All supported initiatives should have the potential for both near and long-term impact. It should be possible to do so at a national level. 50 . There is little doubt that a complex of factors. The SIG assigns greater value to programmes/ organizations that carefully examine the short-term and long-term implications of their actions. but also tend to have a large impact that benefits the communities they work with. Yet. In pursuit of its goals in the three focus areas. the SIG seeks to adhere to the highest standards of academic rigour.

Berkeley and the University of Southampton.org. local stakeholders and international organisations. the SIG seeks to work actively with research agencies. 51 . the SIG works actively to improve the efficacy of these partners and ensure sustained impact. The most recently published papers by the team members are listed below. An important feature of the SIG’s strategy is the belief in strengthening or supplementing existing systems. ICICIsocialinitiatives. Tata Institute of Social Sciences. In pursuit of its goals. This lends clarity to the aim of the programme and prevents its intent from getting diluted over time. Government departments. Infant Health at Birth. this requires taking a comprehensive overview of work already done in the country and outside. Aneesa Arur and Shilpa Desphande (2002).Massachusetts Institute of Technology. As part of this effort. It should also be noted that the group believes modern technologies. such as print and the Internet. The SIG works by identifying gaps in knowledge and practice in its focus areas and locating initiatives that address these gaps in a manner consistent with the SIG’s mission. 1. Working Paper Series. It also encourages its team members to develop independent points of view in their own focus areas. It should be pointed out that the SIG does not function as a rollout agency. thus. seeks to answer certain fundamental questions in its focus areas through the projects it supports and. University of California. Corporates. The SIG. It is crucial that the programmes supported by SIG be time-bound. Another key element of its strategy is the building of long-term relationships with suitable partners. and supports the publication of this work. Among other things. contribute to findings that help the sector. NonGovernmental Organisations (NGOs). thereby. particularly Information and Communication Technologies (ICT) can prove to be important facilitators if used appropriately. The SIG also seeks to disseminate its findings and that of others in the field to a broad spectrum of participants using a variety of media. The identification of research needs is followed by an in-depth analysis of the short-term and long-term implications of various forms of action. rather than investing in parallel structures.

Bindu Ananth and Kartikeya Saboo (2002).org. ICICIsocialinitiatives.2. Working Paper Series. ICICIsocialinitiatives. Bindu Ananth (2002). Elementary Education in India. 3. Bikram Duggal. IUGR)  Proportion of children under three years who are stunted.org. 52 . Extending Banking to the Poor in India.  ICICI Bank aims to improve individual capacity by impacting two important indicators of chronic undernutrition in the first three years at the national level:  Proportion of babies born with a birth weight of less than 2. Micro-Finance: Building the Capacities of the Poor to Participate in the Larger Economy.5 kg at or beyond 37 weeks of gestation (Intra-Uterine Growth retardation. 5. Amit Singhal and Bikram Duggal (2002).org. Tara Beteille (2002). 4. ICICIsocialinitiatives. Emerging Perspectives in Corporate Social Responsibility. ICICIsocialinitiatives. Focus Areas Early Child Health Elementary Education Micro Financial Services  • • • The SIG has three focus areas: Health: Early Child Health (Maximising the proportion of healthy three year olds)  This focus seems to have the potential for maximum long and short-term impact and appears achievable in the most cost-effective and therefore scaleable manner.org.

53 .

your sister. BALANCE TRANSFER FACILITY If you own credit cards issued by other banks and wish to apply for a Sterling Silver/Solid Gold ICICI Bank Credit Card.. with "Bandhan". this beneficial rate of interest is applicable for a full 6 months of your becoming a part of the ICICI Bank family. the unique Add-on Card from ICICI Bank.75% for the Sterling Silver Card and 1. your parents or children above 18 years of age. And what’s more. That's not all. Simply call the ICICI 24-hour Customer Call Center and place your request with the Call Center Executive. your brother . 000 to a maximum 75% of the available credit limit on your ICICI Bank Credit Card.2. 54 . becoming a part of the ICICI family is not just easy but also very attractive. You can change this limit whenever you need to increase or decrease the limit.50% in case of a Solid Gold Card.ICICI BANK CREDIT CARDS BANDHAN A major first for India. You can pre-set their monthly spending limits and any transactions over this specified Spend Limit will be declined. This monthly spending limit can be reset every billing cycle. This special interest rate will not be applicable for new purchases. You can transfer any amount from a minimum of Rs. the Pre-set Limits facility allows you to empower your family with the flexibility and convenience of a credit card with the option of controlling the spend levels. Now you can freely present* your wife. You can transfer the outstanding on your other card(s) on to the ICICI Bank Credit Card and this transferred outstanding will attract an interest rate of just 1.

we will credit your rewards account with 25 bonus points. First time usage Bonus As a very special offer. The redemption of reward points will be done annually.5000. credit shield. 55 . Thus for example. purchase protection. Of course. for the first time that you use your ICICI Bank Credit Card. Unused points will be credited to your card account in blocks of 25 points. you need to have a minimum of 150 points. we offer you accident insurance. but in addition we offer you medical insurance. 100 that you spend earns you a reward point.INSURANCE BENEFITS ON AN ICICI BANK CREDIT CARD Life is unpredictable and we at ICICI Bank understand your concern for your family. 30. Redemption To begin redeeming your reward points.REWARDS PROGRAM A special bonus plan that allows you to earn points every time you use your Card. In effect a spend of Rs 2500 on your card will amount to 25 reward points which is equivalent to a value of Rs. ICICI Bank offers you the most comprehensive insurance related benefits.ICICI Plus . you earn an additional 10% points over and above the normal reward points. an annual spend of Rs. EARN WHILE YOU SPEND. Insurance is by far the best way to safeguard the interests of your family. Accelerator points When your spends in any billing cycle exceed Rs. baggage insurance and household insurance.000 on a True Blue Card ensures that the renewal fee for the next year is less by Rs 300. Every Rs. 25 given back to you. And therefore in addition to any insurance cover you already have. first against your renewal fees.

Simply call our Call Center Executive and make your request. For your convenience. 24. WIDE ACCEPTANCE Your ICICI Bank Credit Card is affiliated to VISA and is welcomed at all Visa Merchant Establishments (Look for the VISA logo 1. This is the only card that allows you to pre-define your own credit limits You can actually request for a limit lower than what your are eligible for and your Card gives you the choice of deciding the limit that you wish to enjoy. except fee.000 establishments across India and Nepal).HOUR CUSTOMER CARE We understand your needs and appreciate that you may need assistance around the clock. (joining. annual. This incredibly powerful feature has been developed keeping your needs in mind. You now have the flexibility of using your Card to pay for everyday purchases on one hand and large value purchases on the other. and it helps you manage your finances prudently.10. The Sterling Silver and Solid Gold Card are accepted globally by over 18 million VISA card .accepting establishments worldwide. renewal) balance transfers and service charge transactions. Your credit limit can be changed on-line and will come in to force from the next billing cycle. we have set-up the ICICI 24-hour Customer Call Center This is equipped with a state-of-the-art system that ensures that your queries get handled efficiently and promptly 56 . SELF SET LIMIT The ICICI Bank Card ensures that you are in charge at all times.Reward points are awarded for all types of transactions. without compromising on your needs.

will be levied. However. payable anywhere in India and favouring any company or individual (you can order a draft up to the available limit cash limit on your account). 24-hours a day. for the Gold Credit Card-Members.CASH ADVANCE FACILITY With An ICICI Bank Card in your wallet. DIAL-A-DRAFT It is now possible to order a draft from the convenience of your home. The amount of the draft will be billed in your monthly credit Card statement. In addition to the transaction fee.000 in a single day. You can withdraw cash on your Card. a service charge will also be levied from the date of transaction to the date of repayment. a transaction fee of 1. For each draft request. Simply call the ICICI 24-hour Customer Call Center and ask for a draft.50. from any Visa participating member bank ATM. The draft will be delivered to your mailing address.15. Transaction charges as applicable will be charged. And with the revolving credit facility you can choose to pay as little as 5% of the billing amount 57 .0% of the amount withdrawn. subject to a minimum of Rs. For your protection we have limited the maximum withdrawal to Rs. from any ICICI Bank branch across the country. no transaction fee will be levied. you will never be strapped for cash. During banking hours you can also withdraw cash. over-the-counter.

-24 Hour Customer Call Center and access to all VISA approved ATMs. 10.000.Reward Program. .000 merchant establishments in India and Nepal. -Accident Insurance of upto Rs 10 Lakhs. Accepted across 1. Purchase Protection of Rs. -Accepted at selected petrol stations. 58 .Fees for the credit card is free for Whole life -Dial-A-Draft at 1% fee. -Comprehensive Insurance for both Primary and add-on cards Dial-A-Draft at 1% fee. 10.TRUE BLUE -India's first value for money card. STERLING SILVER CARD -Free add-on Card Web based access to get details about your statements. payment status and requests.10.000 Credit Shield of Rs. -Airlines and Railway Bookings. -Earn while you spend . -24 Hour Customer Call Center and access to all VISA approved ATMs. payment status and requests.ICICI Plus . -Web based access to get details about your statements.

-Bandhan. -Personal accident. 35. Earn while you spend . -Purchase Protection of Rs.-Balance Transfer at 1. -Complimentary Global One Calling Card. SOLID GOLD CARD -International validity at over 18 million merchant establishments globally.000. -Bandhan.5% Zero lost card liability. Accepted at selected petrol stations. 59 .000.ICICI Plus .Reward Program. -Dial-A-Draft free. Access to Global Customer Assistance Services. Add on Card with self set limits. -India's first value for money card.75% Comprehensive Travel Benefits Purchase protection of Rs. -Airlines and Railway Bookings. Balance Transfer facility at 1. Add on Card with self set limits. 1200 Web based access to get details about your statements.10. -Credit Shield of Rs. Accepted across 1. Comprehensive Insurance for both Primary and add-on cards. Accident Insurance of upto Rs 6 Lakhs.000 merchant establishments in India and Nepal.Reward Program.ICICI Plus . payment status and requests. Comprehensive Travel benefits. 40. household and baggage insurance. 40. Household and baggage -Insurance.000 Earn while you spend . -Airlines and Railway Bookings.50.000 ---Credit Shield of Rs. -Lowest annual fee of Rs. -24 Hour Customer Call Center and access to all VISA approved ATMs. Accepted at selected petrol stations.

the VISA Emergency Assistance Centre can arrange for the shipment of replacement items and obtain any applicable insurance. In case your luggage is lost while travelling. Emergency Message Service You can call toll free or collect on the 24-hour telephone service and leave messages that will be forwarded in the shortest possible time. you get assistance and referral services. VISA Emergency Assistance Services are available to you placing a call to the Emergency assistance Centres in Singapore : 1800-345-1345. VISA will refer you to local legal advisors.EMERGENCY ASSISTANCE SERVICES The multilingual VISA Emergency Assistance Services program offers worldwide emergency referral assistance to VISA Gold Cardholders. These include a wide range of legal. emergency transportation assistance to a hospital. medical and other services. Legal Assistance For legal emergencies. USA : 1-800-336-8472 and Australia : 1-800805341. Medical Assistance In medical emergencies. 60 . UK : 0800-89-1725. Travel Assistance The Visa Emergency assistance Centre can arrange for booking emergency tickets and also assist you with lost ticket reimbursement procedures. repatriation to your country of residence and assistance in case you need a prescription filled or a lost prescription replaced.

61 . All services provided are subject to Terms & Conditions of the VISA Emergency Assistance Services program.Translation Service You get foreign language assistance services in all major foreign languages over the telephone. and assistance in locating local interpreters. Payment for Visa Emergency Services All expenses for services rendered under the VISA Emergency Assistance programmes if applicable will have to be borne by the Cardholder.

Thus HDFC LTD has right since inception positioned it self not just as a company providing finance to customers. but a company that also provides loan counselling.C.D.C H.F.7. One of its major objectives is to increase flow of resources for housing through the integration of housing financial institutions with the domestic market.D. The primary objective of H.C is to enhance residential housing stock and promote home ownership.C.56 crores against Rs.D. 62 . Approvals and Disbursements Total approvals during the year stood at Rs. Marketing effort Marketing efforts and initiatives at HDFC LTD have always revolved around the customer.6879. 1977 by I.I. has emerged as the largest mortgage finance institution in the country. H. Credit appraisal skill and legal and technical expertise has been built over the years. 041. 803.25 crores as against Rs.C.F.77 crores in the previous year.F.I. 616.PROFILE OF H. Loan disbursements during the year were Rs. These set of skills. representing a growth of 31%.F.9.5. technical and legal assistance and other property related solutions.01 crores in the previous year representing a growth of 31%.C was set up on 17th October.D. The objective is to reach out to the customer and provide him/her with all housing related solutions. supplemented with the vast database and trained personnel is today proving to be one of HDFC LTD’ strongest assets. out of the consideration that a specialised institution was needed to channel household savings as well as funds from the capital market into the housing sector.

thereby enhancing the valuations of HDFC. Capital adequacy and 63 . Investments made in the group companies are from borrowed funds. PRUDENTIAL NORMS FOR HOUSING FINANCE COMPANIES(HFC's) The NHB has issued guidelines to HFC's on prudential norms for income recognition provisioning. asset classification. the businesses have tremendous potential. Risk Management HDFC manages various risks associated with the mortgage business. organically and inorganically. HDFC LTD has made investments in various group companies. HDFC Asset Management Company Limited. These group companies have strong synergies with HDFC LTD and such diversification will enable HDFC LTD to offer a wide gamut of financial services and products to customers. While these investments are long-term in nature. HDFC manages credit risk through stringent credit norms. HDFC Securities Limited. GRUH Finance Limited. 2003: are given:. HDFC Chubb General Insurance Company Limited. HDFC Investments Limited. where there is an interest charge debited to the profit and loss account. with out a corresponding revenue flow in the initial years.HDFC Developers Limited.Subsidiaries and Associates Housing is the core business of HDFC LTD. in order to capitalise on HDFC strong brand value and maximise returns for shareholders. while the main focus is to grow the housing portfolio. HDFC Realty Limited. Liquidity risk and interest rate risks arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profiles. These risks include credit risk. provision for Bad and Doubtful. HDFC Trustee Company Limited. Intelenet Global Services Limited. HDFC Holdings Limited. Credit Information Bureau(India) Limited. The shareholding of HDFC in its subsidiary and associate companies as at March 31. liquidity risk and interest rate risk. HDFC Bank Limited.

Any asset which is not standard asset is a non-performing asset. The Tier was Rs. 64 . HDFC's position with respect to the guidelines is as follows:• HDFC's capital for the purpose of determine the capital adequacy companies entirely of Tier 1 Capital.066. 2. where payments were in arrears for over six months as of march 31.2000. The principal loans outstanding(along with Preference Shares and Debentures for financial real • estate projects) .71 Crores. In accordance with the norms prescribed by NHB. • HDFC is in compliance with the limits prescribed by NHB in respect of concentration of credit/investment. • Assets are classified as standard.05% of risk weighted assets. 98. Sub-Standard. HDFC's capital adequacy is at 14.90% of the portfolio.71crores and constituted 0.concentration of credit / investment. doubtful and loss assets.amounted to Rs.

Utility Bill Payments Made Easy .customized to suit your conveniences and make your lifestyle a truly cherishable golden experience.Financial Tracker .Lost Card Liability .HDFC CREDIT CARDS INTERNATIONAL GOLD CARDS Introducing the HDFC Bank International Gold Credit Card.Rewards Program .Travel Made Easy .Exclusive Airport Lounge Facilities .Cash Advance . Find out all the features that are offered by this card: Recognised the world over .Global Travel Related Insurance .Revolving credit facility .Interest Free Credit Period .Cards for your entire family .Comprehensive Insurance .24-Hour Customer Call Center .Balance transfer option .Global Emergency Assistance services from VISA 65 .International Business Travellers' Club (IBTC) Membership .Privilege Pricing .

50.INTERNATIONAL SILVER CARDS The HDFC Bank International Silver Credit Card offers you the best features a card can provide along with the conveniences offered by a bank.Repayments made easy .Hassle-free travel .000/.Save while you spend (Reward Points) .Protecting you through insurance The HDFC Bank Health Plus Credit Card is a feature rich credit with unique features like: 1.Balance Transfer at a lower interest rate .Add-on Cards . Be it low interest balance transfer facility or comprehensive insurance cover. The critical illness cover includes open heart surgery & CABG.Cash at your fingertips .Privileged Pricing on Loans ..No liability on lost card .1. .Wide acceptance .plus a critical illness cover of Rs.. each of its features will help you manage your finances better and leave you free to live a better life.Utility bill payments made easy . Choose which of these features* you would benefit from the most.Repaying loyalty with interest . With this cover you can avail cashless 66 . Cancer. Kidney Failure and Vascular Stroke. Cashless Mediclaim The card offers free mediclaim cover for Rs.5 lakhs.

the add-on cardholders can avail the discounts at participating hospitals as well as with preferred partners.5 lakhs cover to the add-on cardholders. be it your spouse. parents.mediclaim facility at any of the networked hospitals of the Third Party Administrator (TPA) in any city. the best of medical care would cost you less.000 mediclaim plus a critical illness cover Rs. Discounts at participating hospitals With this card. Get fabulous discounts on annual health check-ups.50. Give your family the extra protection a) Add-on Float Cover You have the option of extending the Rs. c) Life Insurance Cover 67 . Whats more. you can get tax break under Section 80 D of the Income Tax Act. 4. brothers or sisters. children. outpatient and inpatient investigations in the participating hospitals in each city. 2. Preferred partners for a healthy life HDFC Bank Health Plus Credit card offers unique discounts and offers from leading health and fitness related brands . children. b) Purchase additional mediclaim Provide extra cover for your family which includes your spouse. Top of Form Bottom of Form 3. brothers or sisters by purchasing additional mediclaim at fabulous discounts of more than 50%.1.Whats more.

To overcome the uncertainties of life you need to plan ahead and create a circle of protection for your family. With the HDFC Bank Health Plus Credit card you can get your life insurance cover from Birla Sun Life Insurance at exclusive premium rates. 1. Save while you spend (Reward Points) Use your credit card and earn reward points. For every Rs.100 spent using your credit card earn 1 reward point. You can redeem the reward points for householder's insurance which includes, fire insurance, burglary insurance and breakdown insurance or for exciting gifts. What's more - you can save the reward points upto 18 months. 2. Protecting through insurance The HDFC Bank Health Plus Credit Card offers you the most comprehensive insurance package at no additional cost. In case of death in an accident. If the cardholder loses his life in an air accident, the nominated kin will receive a compensation of Rs.10 lakhs. In the case of a rail or road accident the nominated kin will receive a compensation of Rs.2 lakhs. 3. Balance Transfer at Lowest interest rates Most cards charge interest at the rate of 2.95% per month. Transfer the same balance to HDFC Bank's credit card and you will pay interest at the rate of only 1.65% per month. For existing customers of HDFC Bank, we offer a special rate of 1.45% per month for 6 months. 4. Utility Bill payments made easy Pay your insurance premium, electricity / telephone / mobile bills using this service. 5. Hassle Free Travel** Dreams of a quiet family vacation are often ruined by hassles of travel bookings. Now with the HDFC Bank International Health Plus Credit Card, book your train and air tickets from the comfort of your home or office. 68

a) Airline & train ticket bookings Avail a 3.5% discount on domestic and 5.5% discount on international travel as also free home delivery on all your bookings as a valued HDFC Bank card holder. Our tie-up with SITA Travels for booking of train tickets. Add-on Cards Get up to 2 supplementary cards for your spouse, parents, siblings (own brother/sister), son and/or daughter (over 18 years) and allow them to enjoy the many benefits of a HDFC Bank International Health Plus Credit Card. 10. Privilege Pricing on Loans As a HDFC Bank International Health Plus Credit Card holder you get loans from the bank at special rates. The rate discount offered is as follows:

Loan Auto Loans Personal Loans Car Loans Used Car Loans

Discount Offered 0.5% 1% 1% 1%


A BRIEF HISTORY OF STANDARD CHARTERED Standard leading Chartered emerging in is the world's bank Its

markets London.


businesses however, have always been overwhelmingly international. This is summary of the main events in the history of Standard Chartered and some of the organizations with which it merged. The early years Standard Chartered is named after two banks which merged in 1969. They were originally known as the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China. Of the two banks, the Chartered Bank is the older having been founded in 1853 following the grant of a Royal Charter from Queen Victoria. The moving force behind the Chartered Bank was a Scot, James Wilson, who made his fortune in London making hats. James Wilson went on to start The Economist, still one of the world's pre-eminent publications. Nine years later, in 1862, the Standard Bank was founded by a group of businessmen led by another Scot, John Paterson, who had emigrated to the Cape Province in South Africa and had become a successful merchant. Both banks were keen to capitalize on the huge expansion of trade between Europe, Asia and Africa and to reap the handsome profits to be made from financing that trade. The Chartered Bank opened its first branches in 1858 in Chennai and Mumbai. A branch opened in Shanghai that summer beginning Standard Chartered's unbroken presence in China. The following year the Chartered Bank opened a branch in Hong Kong and an agency was opened in Singapore. In 1861 the Singapore agency was upgraded to a branch which helped provide finance for the rapidly developing rubber and tin industries in Malaysia. In 1862 the Chartered Bank was authorized to issue bank notes in Hong Kong. Subsequently it was also authorized to issue bank notes in Singapore, a privilege it continued to exercise up until the end of the 19th 70

Kenya. Both the Chartered and the Standard Bank opened offices in New York and Hamburg in the early 1900s.C. in 1911 and Uganda in 1912. proved the most difficult and the branches soon closed. Zanzibar and the D. Japan in 1880 and Thailand in 1894. Over the following decades both the Standard Bank and the Chartered Bank printed bank notes in a variety of countries including China. It pursued a policy of expansion and soon amalgamated with several other banks including the Commercial Bank of Port Elizabeth.Century. Botswana in 1897. South Africa. The Standard Bank was prominent in the financing and development of the diamond fields of Kimberly in 1867 and later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885. re-opening in Vietnam in 1990. During 1904 a branch opened in Vietnam.R. Of these new businesses. in 1863. In Asia the Chartered Bank expanded opening offices including Myanmar in 1862. Zanzibar and the Democratic Republic of Congo (D. The Chartered Bank gaining the first branch licence to be issued to a foreign bank in New York. Botswana. Tanzania in 1993 71 . Pakistan and Indonesia in 1863. the Philippines in 1872. Standard Chartered in the 1990s Even within this period of apparent retrenchment Standard Chartered expanded its network. Some 34 years after the Chartered Bank appointed an agent in Sri Lanka it opened a branch in 1892 to take advantage of business from the tea and rubber industries. the British Kaffarian Bank and the Fauresmith Bank. and expanded into Mozambique in 1894. half the output of the second largest goldfield in the world passed through the Standard Bank on its way to London. Zambia in 1906. Over time. Malaysia in 1875. Today Standard Chartered is still one of the three banks which prints Hong Kong's bank notes Expansion in Africa and Asia The Standard Bank opened for business in Port Elizabeth. Malaysia and even during the siege of Makeking in South Africa. Cambodia and Iran in 1992. A branch in Botswana opened again in 1934 but lasted for only a year and it was not until 1950 that the Bank re-opened for business in Botswana.R.C.). Malawi in 1901. the Colesberg Bank. South Africa. In 1892 the Standard Bank opened for business in Zimbabwe. Zimbabwe.

In 1998 Standard Chartered concluded the purchase of a controlling interest in Banco Exterior de Los Andes (Extebandes). This acquisition makes Standard Chartered one of the leading clearers of dollar payments in the USA. 72 . With this purchase Standard Chartered now offers full banking services in Colombia. With the opening of branches in Macau and Taiwan in 1983 and 1985 plus a representative office in Laos (1996). acquired 75 per cent of the equity of Nakornthon Bank.and Myanmar in 1995. and agreed terms to acquire 89 per cent of the share capital of Metropolitan Bank of the Lebanon. The new millennium has brought with it two of the largest acquisitions in the history of the bank with the purchase of Grindlays Bank from the ANZ Group and the acquisition of the Chase Consumer Banking operations in Hong Kong in 2000. In 1999. an Andean Region bank involved primarily in trade finance. Standard Chartered now has an office in every country in the Asia Pacific Region with the exception of North Korea. Standard Chartered also opened a new subsidiary. Peru and Venezuela. the Middle East. South Asia. Africa and the Americas. Thailand. Standard Chartered acquired the global trade finance business of Union Bank of Switzerland. Standard Chartered Nigeria Limited in Lagos. Standard Chartered today Today Standard Chartered is the world's leading emerging markets bank employing 30.000 people in over 500 offices in more than 50 countries primarily in countries in the Asia Pacific Region. These acquisitions demonstrate Standard Chartered firm committed to the emerging markets. where we have a strong and established presence and where we see our future growth.

CARD FEE DETAILS Primary Entrance fee NIL Annual fee (Yr.STANDARD CHARTERED CREDIT CARDS. The Standard Chartered VISA Mini Cardholder shall strictly follow the operating instructions issued by the bank from time to time regarding the use of Terminals and the System. THE NEW STANDARD CHARTERED VISA MINI The Standard Chartered VISA Mini Cardholder may terminate the card service if he/she does not accept any amendment to the Standard Chartered VISA Mini Cardholder Agreement proposed / made by the Bank.199 Rs. Standard Chartered VISA Mini Cards cannot be used at merchants requiring a manual imprint of a card to complete a transaction.349 73 . Standard Chartered VISA Mini Cardholders should note the following : Standard Chartered VISA Mini Cards cannot be used at ATM facilities and their Terminals which require the Card to be inserted rather than swiped.199 Rs.349 Rs. In particular.499 (Yr. 2 onwards) Supplementary Multiple NIL NIL Rs. Rs. The Standard Chartered VISA Mini Card will be automatically terminated if the Standard Chartered VISA Mini Cardholder terminates the card service in respect of his Card or the Principal Cardholder terminates the Credit Card account with the Bank.349 1) Renewal fee Rs.

New Delhi. • Picture Card Put a picture that is close to your heart and make your card as unique as you want it to be.1 lakh establishments in India and Nepal. Bangalore. Withdraw cash from 6 lakh MasterCard ATMs worldwide and 580 ATMs across 46 cities in India.m.95% p. • Teledraft Facilities with doorstep delivery. Kolkata and Hyderabad • Conveniently placed cheque collection boxes for repayment across centers 74 paying. Chennai. . • Cash Advance Facility Up to 30% of the credit limit.CARD FEATURES: • Balance Transfer Option Transfer your outstanding balance from your other credit cards to the global Standard Chartered credit card at only 1.up to 52 days • 24 hour Help lines at Mumbai.m.75% p. • Revolver Facility Flexible payment option using revolving credit allowing you to pay just 5%of the outstanding amount every month. instead of the 2. that you are currently • Global Acceptance The most widely accepted and respected credit card in over 19 million VISA and MasterCard establishments worldwide over 1. • Photo Card Safest credit card • Zero Lost Card Liability Post reporting of the loss of the card to the Bank • Credit Free Period .

000 60.000 1.00.00. 100 will be charged for the picture card Gold 1000 2000 2000 Executive 300 1200 1200 Classic 100 700 750 Sapnay Nil 400 400 (Salaried) Gross Income (Per (Self-employed) Gross Income (Per Annum) INR Rs.000 1.000 supplementary card (no 1000 500 350 250 75 .50. 1. 1. Minimum age limit: 21 years.000 72.• Supplementary Card for family. Maximum is 60 years (salaried) and 65 years (self-employed) • Issued to Indian Residents only Income Criteria Product Gold Executive Classic Sapnay CARD FEES The membership fees for the global card is Entrance Fee Annual Fee (Yr1) Renewal Fee (From Yr 2) Annual Fee for each entrance) Annual Fee for each Add-on card (no 1000 575 400 250 entrance) *An additional fee of Rs.000 60.50.000 Annum) INR Rs. • Multiple Card to segregate your personal and business expenses Eligibility: • For individuals.000 72.

Our business is more than banking because we touch the lives of people anywhere in many ways.INTRODUCTION OF STATE BANK OF INDIA SBI Card Make life simple The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. Our commitment to nation-building is complete & comprehensive. All our branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes. Banking Facility Of SBI Bank Personal Banking DEPOSIT SCHEMES     Current Account Savings Bank Account Savings Account Savings Plus Account TERM DEPOSITS      Term Deposits Reinvestment Plan SBI MODS Recurring Deposit Maturity Value Calculator PERSONAL FINANCE       Housing Loan Car Loan Educational Loan Personal Loan Property Loan Loan to Pensioners 76 .

          Loan against Shares / Debentures Loan against RBI Relief Bonds Festival Loans Medi-Plus Scheme Teachers-Plus Scheme Sainik-Plus Scheme Tribal-Plus Scheme Justice-Plus Scheme EMI Calculator Credit Khazana SERVICES Locker Gift Cheques Public Provident Fund (PPF) 9% relief bonds PSU Retiring Employees Scheme Loan On Demat Accounts GOLD BANKING    Gold Deposit Metal (Gold) Loan To Domestic Jewellery Industry Metal (Gold) Loan To Jewellery Exporters NRI BANKING              Who is NRI Opening Of NRI Account India Millennium Deposit (IMD) Foreign Currency (Non-Resident) Bank Accounts (FCNB) Non-Resident (External) Rupee Accounts (NRE) Resident Foreign Currency Accounts (RFC) Ordinary Non-Resident Rupee Accounts (NRO) Housing Finance Scheme for Non-Resident Indians Other Investment Schemes Facilities to Returning Indians Money Remittance from USA to India Tax Benefits Letter Of Authority To Operate On Non-Resident (External) Rupee (NRE) Accounts 77 .

 Maturity Value Calculator INTERNATIONAL BANKING          Profile Trade Finance Correspondent Banking Merchant Banking Shipping Finance Project Export Finance Exporters Gold Card Treasury OBU CORPORATE BANKING       Corporate Accounts Group(CAG) Core Credit Products Other Structured Products Trade Finances Fee Based Products Cash Management Product OTHER PRODUCTS    Project Finance Lease Finance Corporate Liquid Term Deposit SMALL SCALE INDUSTRIES SSI Loans     Liberalised Scheme Entrepreneur Scheme Stree Shakti Package Equity Fund Scheme SMALL BUSINESS FINANCE 78 .

E.S Demat Services ATM Services Internet Banking 79 .P.T.        Retail Trade Professionals & Self-Employed Persons Business Enterprises Transport Operators Small Business Credit Card Doctors Plus Paryatan Plus SBI Shoppe RURAL BANKING         Agricultural Banking Crop Loan(ACC) Produce Marketing Scheme (ACC (PML)) Kisan Credit Card Scheme(KCC) Agricultural Term Loans (ATL) Land Development Schemes Minor Irrigation Schemes Farm Mechanisation Schemes LEAD BANK SCHEME & MICRO CREDIT   Lead Bank Scheme Micro Credit ( Self Help Group ) REGIONAL RURAL BANKS  Regional Rural Banks GOVERNMENT BUSINESS   Government Accounts Public Provident Fund SERVICES      e-rail S.

SBI and its Associate Banks became the Corporate Agents of SBI LIFE. SBI LIFE has also been slowly and steadily strengthening alternate channels including Agency channel.400 branches of SBI Group. 80 .225 crore for the year 2003-04 as against the premium receipt of Rs. SBI LIFE is now selling its insurance products through 2.50 crore in SBI LIFE. being 74% of their share capital.129. As at end-March 2004. The year 2003-04 was the 2nd full year of operations for the Company. It received a premium income of Rs. SBI LIFE leveraged the strength of its parent bank and its group. It emerged as the top private insurer in terms of number of lives covered with a market share of about 14%.73 crore during the last financial year. The Bank holds equity of Rs. recording a 200% premium growth.        Safe Deposit Locker Rupee Travellers cheques Information on deceased accounts Gift Cheques RBIEFT e-Pay Telebanking Cash Management Product JOINT VENTURES SBI Life Insurance CompanyLtd (SBILIFE) SBI LIFE undertakes the business of life insurance and annuity in relation to all or any kinds of assurance. SBI LIFE covered nearly 14 lakh lives.

e-statement. over 1575 SBI ATMs & 251 SBI card Cash Points in India. SBI card Alerts. 3%-5% off on air tickets Balance transfer facility @1. Cash access at 810.000 VISA ATMs around the globe and from 5500 VISA ATMs. You can transfer the outstanding on your other card(s) on to the SBI Credit Card and this transferred outstanding will attract an interest rate of just 1.50% in case of a Solid Gold Card.INTRODUCTION OF SBI CREDIT CARD THE POWER OF SBI CARD • • • Accepted at 30 million VISA outlets across the world. becoming a part of the SBI family is not just easy but also very attractive.75%. SBI Card Online. 81 . And what’s more.75% for the Sterling Silver Card and 1. this beneficial rate of interest is applicable for a full 6 months of your becoming a part of the SBI family. VISA emergency services in 75 countries GLOBAL CONVENIENCES • • • • • • Flexibility Protection Plus No Transaction Fee for the purchase at IOC/IBP pumps. BALANCE TRANSFER FACILITY If you own credit cards issued by other banks and wish to apply for a Sterling Silver/Solid Gold SBI Credit Card.

Accelerator points When your spends in any billing cycle exceed Rs.2. 25 given back to you.SBI Plus .This special interest rate will not be applicable for new purchases. for the first time that you use your SBI Credit Card. Redemption 82 . 100 that you spend earns you a reward point. And therefore in addition to any insurance cover you already have. we will credit your rewards account with 25 bonus points. purchase protection. 000 to a maximum 75% of the available credit limit on your SBI Credit Card.5000. You can transfer any amount from a minimum of Rs. we offer you accident insurance. First time usage Bonus As a very special offer. EARN WHILE YOU SPEND. but in addition we offer you medical insurance. Every Rs. Of course. you earn an additional 10% points over and above the normal reward points. credit shield. In effect a spend of Rs 2500 on your card will amount to 25 reward points which is equivalent to a value of Rs. INSURANCE BENEFITS ON AN SBI CREDIT CARD Life is unpredictable and we at SBI Bank understand your concern for your family. baggage insurance and household insurance. SBI offers you the most comprehensive insurance related benefits.REWARDS PROGRAM A special bonus plan that allows you to earn points every time you use your Card. Insurance is by far the best way to safeguard the interests of your family.

83 .To begin redeeming your reward points. Simply call our Call Center Executive and make your request. (joining. an annual spend of Rs. except fee. renewal) balance transfers and service charge transactions. The redemption of reward points will be done annually. SELF SET LIMIT The SBI Card ensures that you are in charge at all times. This incredibly powerful feature has been developed keeping your needs in mind. This is the only card that allows you to pre-define your own credit limits You can actually request for a limit lower than what your are eligible for and your Card gives you the choice of deciding the limit that you wish to enjoy. first against your renewal fees. WIDE ACCEPTANCE Your SBI Credit Card is affiliated to VISA and is welcomed at all Visa Merchant Establishments.accepting establishments worldwide. and it helps you manage your finances prudently. annual. Reward points are awarded for all types of transactions. without compromising on your needs. You now have the flexibility of using your Card to pay for everyday purchases on one hand and large value purchases on the other. Unused points will be credited to your card account in blocks of 25 points. Your credit limit can be changed on-line and will come in to force from the next billing cycle. The Sterling Silver and Solid Gold Card are accepted globally by over 18 million VISA card . Thus for example.000 on a True Blue Card ensures that the renewal fee for the next year is less by Rs 300. you need to have a minimum of 150 points. 30.

000 in a single day.24. subject to a minimum of Rs. Simply call the SBI 24-hour Customer Call Center and ask for a draft. we have set-up the SBI 24-hour Customer Call Center This is equipped with a state-of-the-art system that ensures that your queries get handled efficiently and promptly CASH ADVANCE FACILITY With An SBI Card in your wallet. for the Gold Credit Card-Members. You can withdraw cash on your Card. from any SBI Bank branch across the country. will be levied. you will never be strapped for cash.HOUR CUSTOMER CARE We understand your needs and appreciate that you may need assistance around the clock. payable anywhere in India and favouring any company or individual.50. In addition to the transaction fee. However. For your protection we have limited the maximum withdrawal to Rs. a transaction fee of 1. over-the-counter. During banking hours you can also withdraw cash.0% of the amount withdrawn. For each draft request. no transaction fee will be levied. a service charge will also be levied from the date of transaction to the date of repayment. 24-hours a day. Transaction charges as applicable will be charged. The draft will be delivered to your mailing address. from any Visa participating member bank ATM.15. The amount of the draft 84 . For your convenience. DIAL-A-DRAFT It is now possible to order a draft from the convenience of your home.

A debit card used in this manner is similar to a secured credit card. PINs can be used only where the POS (point of sale) terminal is properly equipped. In a "credit" purchase.with some merchant service organisations. particularly Canada. (as of this writing) a "credit" transaction is without cost to the purchaser while a small fee may be charged for 85 . like a credit card. Visa or MasterCard).will be billed in your monthly credit Card statement. However. Online debit cards use the same underlying technology as ATMs (bank machines) that dispense cash. The use of a debit card in this manner may have a daily limit. and can be used in a manner nearly identical to. the funds are withdrawn directly from the purchaser's check or savings account at a bank. authentication may consist of the use of a numeric PIN (personal identification number) known only to the cardholder. Offline debit cards carry the logotypes of. with the maximum limit being the amount of money on deposit. is used as an alternative to cash when making purchases. the user enters a PIN. and. This is the only method used in some countries. In either case. In some countries . the user's bank account is debited. a separate keypad is needed to allow the customer to enter his or her PIN and select the account from which funds should be drawn. when purchases are made with a debit card. And with the revolving credit facility you can choose to pay as little as 5% of the billing amount DEBITCARD Introduction Which physically resembles a credit card. Some POS terminals allow the user of a Visa or MasterCard debit card to choose whether the purchase is a "credit" or "debit" purchase.g. in particular. Two different types of debit cards are in use today: online and offline. major credit cards (e. the user signs a charge slip (as in a traditional credit card purchase). in a "debit" purchase.

the use of PIN validated transactions with smart-card chip readers is being strongly encouraged by the banks as a method of reducing cloned-card fraud. Debit cards are also similar to stored-value cards in that they represent a finite amount of money owed by the card issuer to the holder. They are different in that stored-value cards are generally anonymous. There are also forms of debit cards (e. the merchant pays lower fees on a "debit" transaction as compared to "credit" transactions. In many countries. or unauthorized use while stored value cards usually do not. Visa Buxx) that are purchased by parents for teens as young as 13. Many consumers prefer "credit" transactions because of the lack of a fee charged to the consumer/purchaser -. are popular among college students who have not yet established a credit history. The parent retains a great deal of control over the teen's use of the cards. while debit cards are generally associated with an individual's bank account. and secured credit cards. Visa and MasterCard recently agreed to settle the largest of these lawsuits and agreed to settlements of billions of dollars.g. from the merchant's standpoint.and the lack of fees charged merchants for processing "debit" debit card purchases and paper checks -have prompted some major merchants to file lawsuits against debit-card transaction processors such as Visa and MasterCard. theft. also. and the POS terminal reading the smart-card chip on the card."debit" transactions. 86 . The fees charged to merchants on "credit" debit card purchases -.and many POS terminals at PIN-accepting merchant locations now make the "credit" function more difficult to access. to the extent that cardholder-present transactions will soon not be possible in these countries without knowledge of a PIN. Debit cards. Other differences are that "debit" purchasers may opt to withdraw cash in addition to the amount of the debit purchase. Debit cards usually offer some protection against loss.

is the answer to all your problems. Regardless of the type of debit card you have. An on-line transaction works like a straight ATM transaction. It is an immediate electronic transfer of money from your bank account to the merchant’s account. A debit card is basically a better way of carrying cash or a chequebook. 87 . the money is subtracted from your bank account. It is NOT a credit card. The card is generally issued by your bank and is connected through the ATM. also called point-of-sale. Rather. Debit cards allow you to spend only what is in your account and purchases should be kept track of just as if you're writing a cheque. instead of debiting your account immediately.Not sure how much you keep spending through your credit card? Well this product then. Instead of using a PIN.usually within two to three days. It combines the benefit of cash and cheque with out you having to carry either of the two. bearing a Visa or MasterCard logo. The merchant’s terminal reads your card and creates a debit against your account. and can be used wherever your card’s brand name is displayed. A Deferred Debit Card looks similar to a credit card. when you use it. this card allows "off-line" transactions. This requires you to enter your Personal Identification Number (PIN) at the store’s terminal. However. It is an electronic card that one can use as a convenient payment mechanism. Most off-line transactions are verified immediately to see whether there is enough money in the account. TYPES OF DEBIT CARDS There are two types of debit cards and two types of debit card transactions: Direct Debit Cards allow only "on-line" transactions. the customer signs a receipt as they would with a credit card. Off-line purchases resemble a credit card transaction. The system checks your account to see if there is enough money to cover the purchase. as well as on-line. the transaction is stored for processing later -.

If a credit card was used for making cash withdrawals a charge is levied and concomitantly interest is charged on the amount such withdrawn from the day of withdrawal. This penalty situation never arises in debit cards. Customers usually get cash back for on-line purchases. delayed payments are penalized at 30% p.400. In case of credit cards. avoiding the need to withdraw cash from the bank for such petty expenses. the amount is credited to your account. The debit card base in India in March 2000 was already at 3. you can usually get a debit card (provided your bank is offering the service) When using a debit card. Seven out of 10 card holders use their card on a regular basis with the average monthly spend on a debit card was Rs 1. it can save you from having to stock up on traveler’s cheques or cash when you travel. which puts total annual spends at over Rs5bn. for off-line transactions. It frees you from carrying cash or a cheque book. If you qualify to open a bank account.000. generally.BENEFITS OF DEBIT CARDS Obtaining a debit card is often very easy. Most importantly. Moreover the usage figures are even more impressive. rates. The bother of making payments at the receipt of the credit card statement is eliminated. In case of international travelers. the transaction will be. debit cards can be used to make smaller value payments. If you return merchandise or cancel services paid for with a debit card.00. 88 . Bare in mind that only two banks namely HDFC Bank and Citibank. especially in other states or countries as one need not verify the authenticity of the payment and the merchant is assured of immediate payment. one does not have to show identification papers or give out personal information at the time of the transaction. Debit cards may be more readily accepted than checks. in India currently offer their customers debit cards. treated as if it were made with cash or a check.a.

in just four years. They can make balancing your account tricky if you are not fastidious about keeping receipts and recording transactions in a timely fashion. It is easy to forget. whereas its debit card base. built up a base of 48mn debit cards. After 25 years in the region. INDIAN DEBIT CARDS 89 .the debit card could be a costly affair to have. in less than 18 months.Both MasterCard and Visa International have already witnessed a huge rise in their debit card bases in the Asia-Pacific region. are defective or were misrepresented. has touched 37mn. Using a debit card may mean you have less protection than you would with a credit card for goods that are never delivered. as with credit cards. for example. Visa too. But. Drawbacks Of Debit Cards: Unlike a credit card. Fees -. debit card transactions give you no grace period. pay-now deal. you can dispute unauthorized charges or other mistakes within 60 days. They are an immediate. MasterCard has built up a credit card base of 80mn. when you pay at the gas pump with a debit card and drive off without your receipt. especially when using an ATM that is not affiliated with your bank.

The Card can also be used as an ATM Card at more than 463.000 ATMs worldwide.000 establishments in India including 1. Hold on to receipts from your debit transactions. Pune and Ahmedabad. The charges for the use of this service are as follows: There are no charges for using the Debit Card at an HDFC Bank ATM. 90 . Delhi. If your card is lost or stolen.000 ATMs across the globe. If your card is lost or stolen. Bangalore. Hyderabad. Crooks are known to "dumpsterdive" for documents that have account numbers and other personal information. Don’t throw them in public trashcans or even in your own trash without first shredding them. Calcutta.500 establishments in Bangalore alone.and Balance Inquiries: Rs10/International Visa/PLUS ATM locations : Cash Withdrawals: Rs110/. report it immediately to your bank. close your account and ask your bank for a new account number and PIN. It can be used at over 235 ATMs in India and over 530. or you suspect it is being used fraudulently. For transactions at Visa/PLUS ATMs the following charges apply: Domestic Visa/PLUS ATM locations : Cash Withdrawals: Rs55/.and Balance Inquiries: Rs10/- CITIBANK: The Citibank Debit Card is accepted at more than 3. The Debit Card is absolutely FREE (no sign-up fee and no annual fee) and there are no transaction fees. Chennai. Memorize your PIN and do not write it on your card.HDFC BANK The HDFC Bank International Debit Card is available to their customers in Mumbai. Tips For Responsible Use Of Debit Cards Do not leave your debit card lying around the house or on your desk at work.

Never give your debit card number over the phone unless you initiated the call and are certain that the recipient is legitimate. Don’t forget that your debit card may allow you to access money that you have set aside to cover a check that has not yet cleared your bank. keep it private. Flourishing economy and rising consumer acceptance bode well for financial cards 2004 was a bountiful year for financial cards in India. such as letters corresponding to your birth date or your phone number. Never give your PIN to anyone. there was an increase in disposable income and consequently a rise in consumer expenditure. Always know how much money you have in your account and review bank statements carefully. Keep your receipts in one place for easy retrieval and better oversight of your account. In line with growing affluence levels and consumer 91 .Don’t choose a PIN a smart thief could figure out. As a result of the thriving economy.

is very appealing as it prevents consumers from overspending. in terms of their expenses. The fact that financial cards are still perceived as a status symbol in India also serve as a contributing factor to the healthy performance registered by financial cards. in 2004. Consumers in India were not only more open to the possibility of owning a financial card but were also not averse to using their cards as a payment mode. These tend to be used like charge cards in the sense that the majority of cardholders tend to pay off their monthly balances in full. Debit cards are highly popular in India as the eligibility criteria are easily met. Charge cards are not as popular with consumers in India due to the lack of flexibility and their often less-attractive rewards and benefits. which are the usual developments accompanying a booming economy. Specifically. Debit cards immensely popular as they empower cardholders While all sectors of financial cards demonstrated growth over the review period. Additionally. financial cards witnessed robust growth. credit card penetration in the developing nation remained low. CREDIT CARDS YET TO REACH FULL POTENTIAL IN INDIA Credit cards form one of the most established sectors of financial cards in India. This sense of empowerment. as well as aggressive promotions on the part of industry players. In most cases. debit cards were pivotal in spearheading the dynamic performance of financial cards in 2004. In terms of transaction value. coupled with the above factors. growth in current terms was 95% on the previous year. the basic requirement is for debit card applicants to have a bank account with the issuing bank. the number of financial cards in circulation increased by nearly 49% on 2003. As at 2003. compared to other Asia-Pacific countries.sophistication. all served to fuel debit cards' robust performance in 2003. the control that debit cards provide cardholders with. Consumers have been observed to prefer to have the option of using the revolving credit line rather than not having it at all . One key barrier to growth was the burgeoning state of the 92 .

regular patrons of these third parties would enjoy discounts and other priorities that they would not get with other cards. It is. credit cards are likely to be used for the payment of school fees and hospitalisation fees in future. which resulted in inflated growth rates as is typical for a newly emerging sector.distribution network of terminals accepting credit cards. This is slightly slower than the 65% CAGR clocked in the review period for several reasons. For instance. For example. CO-BRANDED CARDS WELL RECEIVED Similar to other countries in the Asia-Pacific region. it is interesting to note that cobranded cards have received a warm reception in India. expected that this constraint will be partially overcome in the future as the advent of technology drives the costs of these terminals down. Additionally. First. Indeed. however. as the consumer base for the different financial cards sectors grows bigger over the 93 . e-purse cards only had a significant presence from 2001. Second. among others. it is projected that the number of financial cards in circulation will register a compound annual growth rate (CAGR) of nearly 51% over the forecast period. Industry sources are confident that co-branded cards will emerge strongly in the future in India. SMART CARDS EXPECTED IN THE FUTURE Euromonitor predicts that there remains great potential in India's financial cards in the 2005-2010 forecast period. a petroleum company (eg the Indian Oil Citibank Card involving Indian Oil Corp) or a retailer (eg the First Citizen Citibank Card involving Shoppers' Stop). Industry sources believe that the key to future growth will be to encourage increased usage of credit cards through expanding the scope of acceptance of these cards. as a result of the tie-up with either a mobile phone company (eg the Orange-StandardChartered Visa Card involving Hutchison Max Telecom Pvt Ltd). when consumers dine out in smart restaurants or when they purchase air tickets for travelling. Co-branded cards are popular as they are perceived to provide greater benefits and more attractive rewards. Credit cards are often used for bigger ticket purchases in India.

In this scenario. microchip gadgets and computers are rapidly pushing paper money out and replacing the same with plastic money. Essentially. which can generate revenues for respective governments and enhance traditions of good governance. Taiwan's Health Card. One key trend to watch out for would be the rise in smart cards. AsiaPacific region alone accounts for about 34 per cent of the volume. The cellular phone boom in India estimated to be exploding at over 70 per cent annually. SMART CARD INDUSTRY: CHANGING A WAY OF LIFE By Mehmood-ul-Hassan Khan Combining credit cards. There is great scope for smart cards in Pakistan too. computer chip-driven bits of plastic flap as wonder cards driving the next sunrise industry. growth will naturally become more gradual. there was an appearance of credit cards incorporated with smart chips (eg Citibank's Taj Epicure Diners Club card). debit cards. smart cards.review and forecast periods. Such happy times for smart card makers are feeding the growing banking and retailing industry. debit cards is anticipated to continue to spearhead financial cards in terms of absolute card numbers. Hong Kong's Smart Identity Card System (SMARTICS).8 billion global business in 2004-05. In the forecast period. By the end of 2005. wallets and handbags are carrying plastic cards for no matter what the need in terms of cash and finances. Smart cards usually have multi-purpose lives from being national ID cards to tools for buying bus tickets or paying petrol pump bills. Now. As governments throughout the world build techno-fortresses. computer chipembedded plastic cards that store and transact data known as smart cards are expected to be a US$ 6. The rest of South Asia is an active emerging market for smart cards. the Indian smart card population is expected to increase eight-fold. In the next five years. With Malaysia's MyKad. Infineon and Hitachi are gearing up for the big kill. the Indian government's plan to have a multi-purpose national ID card and South Korea aiming for public official ID cards by 2005. The smart chip not only enables point accumulation to be tracked but also allows for greater security against card fraud. smart cards are used in SIM cards of GSM mobile phones and big projects such as national ID card 94 . companies such as Sony.

"Thailand. 95 . the Philippines. Indonesia.schemes. Vietnam. India and China are at the planning or pilot stage of launching a national smart ID card scheme.

and Hong Kong's increased five per cent to seven million. MCB. The state-by-state breakdown was based on total bank credit card 96 . and North Dakota. while most in the card industry bemoan the lack of a smart card culture in India. India is currently witnessing large-scale adoption of credit cards.400 range were Mississippi. Common shoppers spent a record £11. Visa spending has risen to US$ 275 billion in Asia/Pacific till 13 April 2004. Taiwan's card numbers grew 19 per cent to 22 million. rising 4 per cent and 6 per cent. UBL. 6 per cent in Hong Kong to US$ 14 billion and 25 per cent in New Zealand to US$ 6 billion. Kentucky.6 billion) in November 2004. Idaho and Nevada posted the strongest gains in bank credit card outstanding in 2003. where card numbers rose 38 per cent to 10 million.92 billion on their credit cards. HBL. Union. In US the average general-purpose credit card outstanding per household. The fastest percentage growth was in India where the number of cards on issue increased by 83 per cent to 16 million. The number of Visa-branded cards on issue rose in every Asia Pacific market except Korea.56 billion ($20. ranking first in the world in the growth of its bankcard business. albeit more amongst the urban populace.CREDIT CARDS: THE NAME OF CONVENIENCE The Standard Chartered. Texas was the only one to come in below the national average. Britons currently owe a total of £52. China has issued 700 million bankcards.429. where card numbers rose 42 per cent to four million. Japan saw a 5 per cent growth in the number of cards to 75 million. Among the biggest markets in terms of cards issued. and Thailand. Among the five most populous states. and many others are doing great service to people in shape of credit cards. 12 per cent in Taiwan to US$ 18 billion. CITI Bank. excluding store/gas credit cards. Bank Alflah. which is on the rise. grew a mere 2. Impressive growth was also achieved in the Philippines.5 per cent last year to $6. As a result. respectively. and a host of utility providers are coming up with various kinds of plastic cards. The states with the lowest average bank credit card outstanding per household in the $3. the credit card spending rose 12 per cent in Australia to US$ 61 billion. Now SBP has enhanced the credit card limit up to Rs2 million. Australia's rose one per cent to 11 million. Among other major Asia Pacific markets.

VISA. Access to a choice of debit or credit cards is of particular significance in a region where many consumers remain outside the banking system. all citizens availing bus and metro services are provided with smart cards 97 . DEBIT GROWTH OUTPACES CREDIT Growth in spending on debit cards once again outpaced that of credit cards. MasterCard. RISE TO SMART CARDS A smart card has a microchip. China is slated for high growth with about 750 to 800 million smart card users. Being developed in Beijing are electricity meters activated by prepaid cards. which enables it to store more information and perform more functions than the magnetic-stripe card. compliment the high user base.3 million households at year-end 2003. In Hong Kong. globally the two segments are approximately equal and significant growth is expected in debit volume in the coming years. the worldwide volume of smart cards has increased five-fold to 1. While spending on debit cards in Asia Pacific currently remains a fraction of that on credit cards.9 billion cards. who account for almost 75 per cent of the total smart card user base. Pay phone users. China: On Hainan Island. and are prey to the extremely high costs associated with informal and unregulated lending sources. In six years. Discover. Hong Kong: The new ComPass Card rewards bonus dollars immediately upon every purchase. test cards are equipped to record social service benefits. and American Express outstanding of $677 billion and 105. especially after the country's decision to issue smart cards to every citizen.

Doctors can thus access their health data at the touch of a button Rajasthan: In Nayla. Thailand: Thai Farmers Bank ATM cards can also be used to obtain health and emergency services.00. a village in members of the women's co-operative society has been using smart cards to maintain their milk delivery and payment records. and is likely to reach Rs 37. they work both as credit cards and keys to the company gym and other facilities.000 victims of the 1984 Bhopal gas tragedy have been issued smart cards.Japan: More than 11 million cards are in use. Bhopal: About 2. ARY cards. At NTT. second only to Europe like China. Usage of smart cards in major states/cities of India Bangalore: Even churches are advocating to their members to store their genealogical data onto smart cards. and purchase-incentive points. Phone card and many more are in practice in the country India: There is influx of a variety of smart cards. Perineum cards. and with an approximate year-on-year growth of 45 per cent. At present.000 crore by the year 2010. Philippines: Top local credit-card issuer Bankard has launched an installment card for low-income users. Loyalty Cards. a number expected to reach 5 million users by the end of the current fiscal and close to 22 million by the end of 2005. Sugarcane farmers too use similar cards 98 . India's numbers pale in comparison to other markets in Asia Pacific (the region contributes almost 40 per cent of worldwide smart card sales. The smart card industry in India is currently pegged at around Rs 50 crore. Pakistan: Medicards. India has close to 8 million smart card users. which contain their medical history. Hong Kong and Japan.

* Health care cards allow doctors to access and manage a patient's medical records and insurance information without compromising privacy. petroleum dispensers. * Multi-functionality as a payment. * They also reduce the time spent on updating paper records. 99 . and at many places they could replace human intervention. ADVANTAGES OF SMART CARDS According to statistics from the Bank of International Settlement. The country like Pakistan the rise and commonness of smart cards can reduce forgery of public funds. application and networking device renders the smart card as the perfect user interface in a mobile. * Smart cards offer enhanced security. the government issued smart identity cards to fishermen and their dependents to get rid of pretenders posing as a fisherman's kin to claim compensation. parking meters and public phones are lowered. * Smart card-based systems are highly configurable to suit individual needs. The cards are also used to identify real fishermen from cross border infiltrators who pose as fishermen. * Contact and contact less toll payment cards streamline toll collection procedures. * Smart cards are used in distributing a government's welfare payments in order to reduce frauds and abuse. convenience and economic benefits.Gujarat: In." * Smart cards are cost-effective in the long run as they cut down the cost of keeping paper records. * Maintenance costs for vending machines. * Smart cards incorporate encryption and authentication technologies that can implement the issuer and user's requirements for the highest degree of security. reducing labour costs as well as delays caused by manual systems. networked economy. (BIS) smart card transactions in France have almost caught up with the value of cheque transactions at 13 billion francs.

Great:::::isn't it? I would say it would rather be cruel to take money through credit cards 100 . because they have to make regular fuel purchases. In our country loyalty cards are being used to have petroleum and diesel. public transport companies can introduce variety of smart cards.POTENTIAL USERS The first potential users for smart cards will be car owners. REVIEWS OF PEOPLE ABOUT CREDIT CARDS (PLASTIC MONEY) Its plastic money you just know when you use it and being easy to carry and use. you do not think twice before spending. The second largest base would be the user of mass transportation where the average purchase size is between Rs5 to Rs200. Wow! Wonderful again to find that you have to make the payment after almost 20 days after the arrival of the same and if you spend in the beginning of the month. you end up making payments after almost 50 days. Pakistan Railways.

so is credit. which he is now spending. All credit does is give you the leverage over your current financial situation to spend more than you can with your own money. which is the same when you start using a card. The more you have the richer you are?? The glory is oh so painfully short lived. do it within your means. imagine the level of mental disorder the person could go through especially when he has the entire family to handle too. LIMITATION As this project of mine is based on the financial product i. It’s difficult to change a habit and using a card would then be a habit for the one who starts using it regularly. Use your discretion before you decide to pull out the plastic.from the person who does not even earn the amount. If he goes bankrupt or does not get a monthly salary. credit cards through I have my full efforts to know the basic requirements of the segment but during my study I found several things which are unanswered yet and I too think that to tap the untapped market or segment we people will have to give the answers to that questions like 101 .e. You are. where you just need to take care of the fact that you have enough amounts in your bank account to use it. Whenever you use it. Ah the temptations of a credit card. Limit yourself to ONE credit card that you use in case of emergencies or in cases where the only payment method is your credit card. the better option would be to go for a Debit Card. So keep those urges down. Just like anything else in moderation is good. One careless extravagant moment and you could spend the rest of your life paying for it. Using a credit card could be as dangerous as probably commencing to smoke or falling for one single female who does not even want to know you. I would recommend going easy on your extra capital. As compared to a credit card. Again in a habit you always raise the level of wrong consumption. If you decide to splurge. Credit isn’t your worst enemy. Unless you have a compelling reason to buy whatever it is you need. But the buck (literally) stops there.

which are participating in customer dissatisfaction. 4 The changing services and the interest rates are also the cause. CONCLUSION With respect to the secondary data collected I have reached to the following conclusions in my project. what it is. how it is beneficial to them so finally we can say the less awareness of this product in between the customers. how it works. My secondary data that helps me to practically analysis the data which I collected through internet and magazines especially the reviews and critics comments about the use of plastic money specially( credit cards and debit cards ) : 102 . 3 Several has been found in recent past about the mishappening and forgery of the cards.1 The customers having very less idea about the plastic money. 2 Even who are using this facility most of them are afraid about the services that are being provided by the facilitators.

To add the popularity of the card and to increase the numbers of users the banks are more liberalized in attracting new consumers.Looking at the current scenario we can well identify that the plastic money is taking a upper trend in India due to which more and more customers getting attracted towards it. Debit cards may be more readily accepted than checks.Since many customers are increasing and so the number of defaulters also. Due to the increase in tendency of non repayments the bad debts of bank keep on increasing. The study of credit card does not lead to any concrete conclusion because people that credit cards increase their purchasing power while the other half were of the view that it doesn’t because people have understood and realized the fact that although they have to pay later but they have to pay from their pocket. especially in other states or countries as one need not verify the authenticity of the payment and the merchant is assured of immediate payment. Thus as per the study made through the analysis it was found out that credit cards do increase the purchasing power of the consumers but to a certain extent because it gives them the liberty to pay later but the consumers are becoming smarter and have understood the scenario quite well so we cannot say that it altogether affects the buying habits because they have realized that will have to face the financial burden later on . The media plays a very important role in attracting the customers to choose a particular bank and its services and it can also help to retain the acquired customers also. 103 .

Finely I can say that plastic money has an importance in present scenario and most of the people want to keep money in plastic form.com Timesofmoney.com Magazines: 104 . com Indiainfoline.com Creditreporting. **BIBLIOGRAPHY** Websites : Google.

Business world India Today 105 .

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