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.


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

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

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

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. Salary account holders can avail of the overdraft without any collateral. as well as to the general public.If it is for the convenience of not carrying cash then a debit card can suffice. shares. For the general public. 40. Then why should a customer pay 2.a. and up to 65% of the face value or against fixed deposits at 9% p. if it is for the free credit that the companies claim they give. And. Almost all banks offer overdraft facilities at reasonable rates to customers who have salary accounts with the said bank. one can avail an overdraft facility against NSCs at 13% p.5% per annum for overdraft against fixed deposits? ADVANTAGES OF HAVING A CREDIT CARD 7 . banks provide overdraft facilities against collateral like NSCs. 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. fixed deposits. 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. up to 90% of the value.95% interest per month on an amount of Rs. Similarly.a.000 to a credit card company when he can pay 1% interest per month on the overdraft against the salary account or 8. etc. 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. which is called a clean overdraft. 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. Going a step further.

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 cards that help accumulating points towards reducing the cost of your new car. There are a number of innovative credit cards that help benefit the customer. 8. 4. 9. 6. 2. 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. 5.1. It helps to establish a credit history and can help in getting loan if needed. You can get cash advance anywhere at so many cash outlets. 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. 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. On internet it is the preferred option and you can also participate in on line auctions if you have good credit rating. the travel insurance is covered. If a airline ticket is booked on a credit card and especially if you are going overseas. 3. 7. REASONS OF FEAR DURING ACCEPTANCE OF PLASTIC MONEY 8 .

Some credit cards have conditions that may put you in difficulty if you have not read the fine print. There are a number of cases of double dipping done at your expense when paying at an outlet by credit card. Using credit card exposes one to the possibility of some companies profiling and lobbying you based on your spending pattern. 4. 6. 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. so there are several things to be kept in mind and people should take in using it. So being a good creation and instrument of financial market it is risky too. The happy are those credit card users that pay up and take advantage of the free credit days that the credit card companies provide. They can loose track of payments and be in difficulty. 5. There are always dangers when money matters are involved but one has to live with the necessary evil. There is a temptation to acquire more and more cards. Some have more than their share of cards. Then there is a danger of someone can get hold of your credit card number and misuse it. RISKS IN THE BUSINESS TO THE BANKS: 9 . Some governments also take interest in the spending patterns of individuals and credit card statements make their job easier. 2.1. 3.

Banks excited at the projected 40% growth rate1 in the plastic money industry are apprehensive about the potential corresponding increase in fraud cases. banks have started the Photo card Option which provides the photograph of the cardholder on the card. 0 (for Gold card) and Rs. 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. Default in payments . Through the Hot Card Bulletin which is continuously upgraded and sent to merchant establishments to provide them with the current status. after trying to recover it for six months. 1 10 . 2. These banks take about a month to replace the missing card. The marketers in India find it more cost effective to just right-off the unpaid amount in their balance sheets. Multiple Imprints or Record of Charge (ROC) Pumping . 1.These account for 60% of fraud in India. In case of loss all multinational banks and some Indian banks limit the liability of the cardholder upto Rs. To combat this. than to pursue it throughout the litigation labyrinths.Currently banks have huge amounts of funds blocked with willful defaulters. They are also providing information about the lost/stolen cards . 3. But the success of this measure is debatable. Some banks carry the risk themselves and investigate the loss before determining the liability of cardholders. Some banks register upto 7% fraudulent case in a year. 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.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. Lost/Stolen Cards .

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

When the customer applies to the bank for a credit card. The customers then becomes a card holder and can use the credit card to purchase goods or services from a merchant.PARTIES INVOLVED IN CREDIT CARD BUSINESS. 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. When one applies and is issues the card. THE CARD HOLDER. the bank issues credit card with a specified credit limit. Each month the 12 .

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

Most of the bankers 14 . where it is hard to trace the trail of money from the beginning to the end.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. 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. Still. capable of financing projects in any country in the world.

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

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

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

is growing at 20-25 per cent per annum. But corporate cards continue to have good potential. in the developed markets of Australia. The use of corporate cards can bring savings up to 40 per cent for the middle market companies through process savings and purchase savings. From the half-a-million cardholders in 1992. ‘‘but the name is confidential.” 18 . Interestingly. ‘‘A 24th country has just signed on.subscriptions and insurance. with sales revenues from Rs 5 crore to Rs 500 crore incurring a total travel and entertainment expenditure is $2. while 18 per cent said that they would add more credit cards to their wallets. Since then Securency has spread its ambit to 23 countries—Bangladesh to Vietnam. the total billings on cards are estimated at over Rs 10.7 billion. 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. and now Singapore. Also. The credit card market in India. there are about 30. the frequency of card usage is expected to go up in the forthcoming months. the population is at a whopping nine million today. both even higher than Hong Kong and Australia. Malaysia tops at 42 per cent. About 32 per cent of the consumers surveyed anticipate using the card more frequently in the next six months.000 mid-market companies in India. In this category. according to American Express. Singapore. obviously due to saturation. According to American Express. the number of credit cards are expected to remain the same. growing at 20 per cent per annum. However. Australia began printing plastic notes in 1988.’’ said a Securency official. Hong Kong and New Zealand. Nepal to Mexico. Taiwan at 31 per cent. According to the wallet study. This expense in India is expected to grow at the rate of 8 per cent and is estimated to exceed $5 billion by year 2006.000 crore.

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

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

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

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

In 1951. however. The merchant agreed to honor the card and then forward his credit voucher to Diners club for payment once a month. 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 merchant on the other hand. the Midwest bank card system was started. The success of Diners club pan was such that the American Express company entered the field in 1958. 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. Today more than 60 million credit card accounts exist in the United States. the first National bank of long island became the first bank to offer its customers a credit card plan. In 1966. 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 . This area was not very important. while Hilton Credit Corporation initiated the "carte blanche" plan the following year. By at least the beginnings of the 1970s the personal credit card had become a fixture in the nation’s economy.

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

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

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



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

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

Amex has a scheme for waiving the annual fees if the cardholder spends more than Rs45. 33 . Several of them have been have been launched recently.000 off at select outlets for MRF auto coat car painting charges. There is also the Times card and Bharat Petroleum BOB card. With this card one does not require to pay a transaction fee for purchasing petrol at any Indian Oil outlet. The card holder gets a 5% discount on all AMCO and Exide make batteries from authorized dealers and Rs1. And for the first six months the Amex card holder gets the benefit of a lower interest rate of 1. called Balance Transfer Service. 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.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. These cards give you discounts at several outlets. Companies like Indian Oil Corporation have tied up with Citi bank to launch Indian Oil Citibank card.95% for most other banks. Another new thing on the horizon are the so-called co-branded cards.99% per month as compared to 2. helps the cardholder to pay off out standings on other credit cards. Amex will pay the card issuer and transfer the amount due to the Amex card.000 in the preceding 12 months.

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

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

So. just after 10 years it was launched in the market of United India and upto Rs.000/. wherever you are in the world.00.000 in 1990. or Rs. This insurance is available to you. the Diners Club Card does not restrict you with a pre-set spending limit.000/.while traveling abroad. 60. 36 . This insurance is on first loss basis that insures articles for the entire sum insured. The early eighties saw the launch of credit cards in India by some Indian banks.and 000/. At Diners Club. The total credit they provided in 2004. viz. with Visa and Master Card affiliations.000business establishments in the country now accept credit cards. . Baggage Insurance Baggage Insurance protects your baggage against theft or loss for upto Rs. 1. you’re spending and payment patters and personal resources determine how much you can charge.2 laky in any other accident. 40.CITIBANK CREDIT CARDS DINERS CLUB CREDIT CARD Diners Club was the first card in the Indian market.per annum. over time. you are insured against loss of life in an air accident for Rs.30 laky. Central bank. Credit Card was a status symbol for upscale individuals who had high travel and entertainment needs. More than 40. The size of the credit card market was around 300. Andhra bank et. 80000 crore.05 was Rs. Club Assurance As a Diners Club Member. Unlike other Card. Club Protection Household Insurance this cover protects household articles (excluding jeweler and valuables) for a value of upto Rs. It was the firs charge card in the world. Launched in 1960. FEATURES OF THE CARD Your lifestyle demands complete financial flexibility and convenience. you set your own limit.

these Points are 'evergreen'. Moreover. If you lose your air tickets you will be reimbursed for it upto Rs. you also get the most powerful rewards program in the country.100 spent on the Diners Club Card. you will be entitled to Rs. 10. which means you can encash them whenever you want.with Fast Track option With Diners Club Card. You can redeem the Rewards Points you have earned for fabulous travel packages and delightful gifts.Delayed Baggage If your baggage is not delivered within 12 hours of arrival of a flight. you earn one Club Rewards Point. you can claim upto Rs. 50. Delayed Flight If you miss an onward flight due to late arrival of an incoming flight.000/. for a period of 180 days.000/Club Rewards .25.000/.towards the cost of obtaining a fresh Passport. For every Rs.000/. Besides Diners Club has tied up with Flying Returns. from the time of purchase up to a value of Rs.1 frequent flyer program from Indian Airlines and Air India.000 reimbursement for hotel accommodation.5. and if there is no alternative flight within 6 hours (of actual arrival time) or the airline do not provide accommodation. Loss of Passport/Ticket If you lose your passport in a foreign country.000/Purchase Protection Under International Purchase Protection. purchases on your card are insured against loss or damage due to fire or theft.when abroad. you will be reimbursed for purchase of essential clothing of upto Rs.15. India's India and Rs. Which means you can now redeem your Points for free miles! 37 .5.

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

your Card comes with FREE Personal Accident Insurance (uptoRs.20lakh) Free House hold Insurance This cover protects household articles (excluding jewelry and valuables) for a value of up to Rs. purchases on the Card are insured against 39 . this Card gives you the ultimate financial freedom in India and everywhere in the world.the Citibank International Gold Card.25. FreePassportLossInsurance If you lose your passport in a foreign country.000/. Free Delayed Flight Insurance If you miss an onward flight due to late arrival of an incoming flight.For someone as powerful as you. only the most powerful Card in the world will do .15.000/. FreeGlobalPurchaseProtection Under International Purchase Protection. This is valid for primary Card members reimbursement for hotel accommodation.5000/-. you will be entitled to Rs. and comes with the advantage of spending in International currencies and paying back in Indian Rupees! Comprehensive Insurance Benefits * PersonalAccidentInsuranceuptoRs.per year. you will be reimbursed for up toRs. and if there is no Alternative flight within 6 hours (of actual arrival time) or the Airlines does not provide accommodation. you can claim up to Rs. 40.75.while traveling abroad. 60.000/. A true reflection of your power. On loss of an air ticket.000/in India and up to Rs. Free Baggage Insurance This unique insurance protects your baggage against theft or loss for up to Rs.000/.20lakh Whether you are traveling in India or overseas. The best part is this Card is yours at no additional cost.towards cost of obtaining a fresh passport.

What's more. 40 . You can also choose to pay your Card Renewal Fee (in part or full) using your Rewards Points as well. Unique reward program. Free GlobalOne Calling Card The next time you make an international call from overseas. And pay as little as 5% of your total outstanding every month. your Citibank Rewards Points are evergreen and never lapse. free Hotel Nights. leather accessories and much more. you do not need to use precious foreign exchange or hunt for loose change. In fact your tickets will be delivered to you at no extra cost. 40.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. 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.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.000/-. 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. Special Discounts on Travel India's leading travel management company Travel House (a member of the ITC Group) brings you 3. Every time you use your Card you earn Citibank Rewards Points that can be exchanged for many exclusive privileges like Free Air Miles. Revolving Credit Facility With Citibank's powerful Revolving Credit Facility you can choose to buy high-value items now and pay later in parts. The Global One Calling Card makes international calling absolutely easy.

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

is gaining its market and competency. 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. What's more your Citibank Rewards Points are evergreen and never lapse. Due to wide acceptance in the market every institution in financial market whether it public sector or private sector 42 . No doubt due to several advantages of it. You can also exchange your Citibank Rewards Points to pay your Card Renewal Fee (in part or full).CDs to wallets.

CITI BANK. INTRODUCTION OF ICICI BANK 1995: The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank. SBI. Every banking company is ready to serve with better schemes. Banks like ICICI. with the objective of creating a development financial institution for providing 43 . 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.institution are engaged in this discipline with better customer focused strategy to capture the untapped market soon. terms and conditions which can suit the customers’ requirements. The government of India is also taking initiative to protect the consumer rights in this credit cards division. 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. IDBI and STANDARD CHARTERED are engaged and competing for the market capitalization. So this market is now a days a global market which is gaining its growth like anything. the Government of India and representatives of Indian industry. HDFC.

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

Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). United Arab Emirates and Bangladesh. house loans and loans for consumer durables. 2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank. 1. : The name "The Industrial Credit and Investment Corporation of India Limited " was changed to "ICICI Limited". : Merger of ICICI Limited.637 crore in fiscal 2004).car loans. 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. 45 . life and non-life insurance. : ICICI announces takeover of Anagram Finance.850 ATMs. ICICI Bank's equity shares are listed in India on the Stock Exchange.214 crore at December 31. 1998+ : Introduced the new logo symbolizing a common corporate identity for the ICICI Group.391 crore in the nine months ended December 31.curve based pricing. branches in Singapore and Bahrain and representative offices in the United States. venture capital and asset management. ICICI Bank has a network of about 505 branches and extension counters and about 1. ICICI Capital Services Ltd and ICICI Personal Financial Services Limited with ICICI Bank. As required by the stock exchanges. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. : ICICI becomes the first Indian Company to list on the NYSE through an issue of American Depositary Shares. : ICICI Bank announces merger with Bank of Madura. 1. 1999 : ICICI launches retail finance . ICICI Bank currently has subsidiaries in the United Kingdom and Canada. 2004 (Rs. 2002 : Moodys' assign higher than sovereign rating to ICICI. 2000: ICICI Bank becomes the first commercial bank from India to list its stock on NYSE. OVERVIEW ICICI Bank is India's second-largest bank with total assets of about Rs. China. : ICICI announces takeover of ITC Classic Finance. 2004 and profit after tax of Rs.146. 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.

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

Interactive features include discussion boards and facilities to post papers. by the High Court of Gujarat at Ahmedabad in March 2002. have been integrated in a single entity. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. Enable online application for funding. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. the ICICI group's financing and banking operations. Consequent to the merger. strategic investments and cross holdings among public sector entities. articles or other resources. both wholesale and retail. Publish research related to innovations and significant problems within the identified thematic areas. SOCIAL INITIATIVES Bring together participants in the development process to widen and deepen the discourse informing development practice. with ICICI Bank. and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 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 .of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its whollyowned retail finance subsidiaries. *Free float holding excludes all promoter holdings.

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

Bindu Ananth (2002). the programmes and projects supported by the SIG are required to cater to the poorest. They should enable them to become active and informed 49 . Section II examines the broad challenges in micro finance. Section I reiterates the crucial role of micro finance in reducing vulnerability and enhancing the prospects of growth for poor households. icicisocialinitiatives. Emerging Perspectives in Corporate Social Responsibility.  Strategy At a very basic level. infant health at birth. 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.  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". savings and investment. Scaling up Micro Financial Services: An Overview of Challenges and education and access to basic financial services. Section III provides an overview of the various micro financial services (insurance. Given this perspective. credit and other risk management instruments). Bindu Ananth and Soju Annie George (2003). of databases. 6. Within these broad areas. 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 Abstract:This paper attempts to examine specific issues in the delivery of micro financial services and outlines some new approaches towards scaling up. ICICIsocialinitiatives. the paper highlights some of the regulatory issues that impede the progress of banking along the lines suggested. elementary education and micro financial services define the areas in which the SIG’s work focuses.

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

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

Emerging Perspectives in Corporate Social Responsibility. 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. ICICIsocialinitiatives. Tara Beteille (2002). Extending Banking to the Poor in Bindu Ananth and Kartikeya Saboo (2002). 5. Bindu Ananth (2002).org. 3. IUGR)  Proportion of children under three years who are stunted.2. 52 .org.5 kg at or beyond 37 weeks of gestation (Intra-Uterine Growth retardation. Bikram Duggal. Working Paper Series. Micro-Finance: Building the Capacities of the Poor to Participate in the Larger Economy. ICICIsocialinitiatives. Elementary Education in India. Amit Singhal and Bikram Duggal (2002).  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. ICICIsocialinitiatives. ICICIsocialinitiatives.

53 .

your brother .50% in case of a Solid Gold Card. 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 1.75% for the Sterling Silver Card and 1. This monthly spending limit can be reset every billing cycle.2. 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. You can pre-set their monthly spending limits and any transactions over this specified Spend Limit will be declined. That's not all. your sister. This special interest rate will not be applicable for new purchases. becoming a part of the ICICI family is not just easy but also very attractive. Simply call the ICICI 24-hour Customer Call Center and place your request with the Call Center Executive. You can transfer any amount from a minimum of Rs.ICICI BANK CREDIT CARDS BANDHAN A major first for India. And what’s more. your parents or children above 18 years of age. the unique Add-on Card from ICICI Bank. 000 to a maximum 75% of the available credit limit on your ICICI Bank Credit Card. Now you can freely present* your wife.. with "Bandhan". 54 . 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. You can change this limit whenever you need to increase or decrease the limit. this beneficial rate of interest is applicable for a full 6 months of your becoming a part of the ICICI Bank family.

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

This incredibly powerful feature has been developed keeping your needs in mind.10. except fee.000 establishments across India and Nepal). You now have the flexibility of using your Card to pay for everyday purchases on one hand and large value purchases on the other. 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 . 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. For your convenience.Reward points are awarded for all types of transactions. renewal) balance transfers and service charge transactions.HOUR CUSTOMER CARE We understand your needs and appreciate that you may need assistance around the clock. 24. Simply call our Call Center Executive and make your request. SELF SET LIMIT The ICICI Bank Card ensures that you are in charge at all times. The Sterling Silver and Solid Gold Card are accepted globally by over 18 million VISA card . Your credit limit can be changed on-line and will come in to force from the next billing cycle. and it helps you manage your finances prudently. annual.accepting establishments worldwide. (joining. without compromising on your needs. 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.

for the Gold Credit Card-Members. will be levied. Transaction charges as applicable will be charged. During banking hours you can also withdraw cash. The amount of the draft will be billed in your monthly credit Card statement. subject to a minimum of Rs. a transaction fee of 1. you will never be strapped for cash. 24-hours a day. For your protection we have limited the maximum withdrawal to Rs. no transaction fee will be levied. However. over-the-counter. a service charge will also be levied from the date of transaction to the date of repayment. Simply call the ICICI 24-hour Customer Call Center and ask for a draft. In addition to the transaction fee.15. 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). DIAL-A-DRAFT It is now possible to order a draft from the convenience of your home. The draft will be delivered to your mailing address. from any ICICI Bank branch across the country.CASH ADVANCE FACILITY With An ICICI Bank Card in your wallet.50.000 in a single day. For each draft request. 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. You can withdraw cash on your Card. from any Visa participating member bank ATM.

58 .TRUE BLUE -India's first value for money card. -Earn while you spend . Purchase Protection of Rs.ICICI Plus . -Accident Insurance of upto Rs 10 Lakhs.Fees for the credit card is free for Whole life -Dial-A-Draft at 1% fee.000 merchant establishments in India and Nepal. payment status and requests. -Accepted at selected petrol stations.Reward Program. -Web based access to get details about your statements. -Comprehensive Insurance for both Primary and add-on cards Dial-A-Draft at 1% fee. . payment status and requests. -24 Hour Customer Call Center and access to all VISA approved ATMs. STERLING SILVER CARD -Free add-on Card Web based access to get details about your statements. -24 Hour Customer Call Center and access to all VISA approved ATMs.000 Credit Shield of Rs. -Airlines and Railway Bookings. Accepted across 1.10. 10.000. 10.

40. Comprehensive Insurance for both Primary and add-on cards.ICICI Plus . -Complimentary Global One Calling Card.000 Earn while you spend . Accepted at selected petrol stations. Balance Transfer facility at 1. Add on Card with self set limits. 1200 Web based access to get details about your statements. -India's first value for money card. -Airlines and Railway Bookings. Comprehensive Travel benefits. 40.000 ---Credit Shield of Rs. SOLID GOLD CARD -International validity at over 18 million merchant establishments globally. Accepted across 1.000.000. Add on Card with self set limits. -Lowest annual fee of Rs. -Purchase Protection of Rs. 35. payment status and requests. -Bandhan.Reward Program. -Personal accident.10.5% Zero lost card liability. Earn while you spend . Accident Insurance of upto Rs 6 Lakhs. Access to Global Customer Assistance Services. Household and baggage -Insurance.-Balance Transfer at 1. -Airlines and Railway Bookings. -Dial-A-Draft free.75% Comprehensive Travel Benefits Purchase protection of Rs. household and baggage insurance. Accepted at selected petrol stations. -24 Hour Customer Call Center and access to all VISA approved ATMs. -Bandhan.50.ICICI Plus . 59 . -Credit Shield of Rs.000 merchant establishments in India and Nepal.Reward Program.

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

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. and assistance in locating local interpreters. 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.

56 crores against Rs. representing a growth of 31%.C H. 62 .25 crores as against Rs. Approvals and Disbursements Total approvals during the year stood at Rs.C was set up on 17th October. 616.D.9.5. Marketing effort Marketing efforts and initiatives at HDFC LTD have always revolved around the customer. technical and legal assistance and other property related solutions. The objective is to reach out to the customer and provide him/her with all housing related solutions. but a company that also provides loan counselling. 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. 041.D.F.C. One of its major objectives is to increase flow of resources for housing through the integration of housing financial institutions with the domestic market. The primary objective of H. Loan disbursements during the year were Rs.D.I.F. 803. supplemented with the vast database and trained personnel is today proving to be one of HDFC LTD’ strongest assets.D.6879.PROFILE OF H.C.F. Credit appraisal skill and legal and technical expertise has been built over the years.01 crores in the previous year representing a growth of 31%. Thus HDFC LTD has right since inception positioned it self not just as a company providing finance to customers.F. 1977 by I.C. These set of skills. has emerged as the largest mortgage finance institution in the country. H.I.C is to enhance residential housing stock and promote home ownership.7.77 crores in the previous year.

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

71 Crores. The principal loans outstanding(along with Preference Shares and Debentures for financial real • estate projects) . HDFC's capital adequacy is at 14. 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. doubtful and loss assets. • HDFC is in compliance with the limits prescribed by NHB in respect of concentration of credit/investment.05% of risk weighted assets.71crores and constituted 0.066. 98.concentration of credit / investment. Any asset which is not standard asset is a non-performing asset. where payments were in arrears for over six months as of march 31.2000.90% of the portfolio. Sub-Standard.amounted to Rs. In accordance with the norms prescribed by NHB. • Assets are classified as standard. 2.

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

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

the add-on cardholders can avail the discounts at participating hospitals as well as with preferred partners.50. c) Life Insurance Cover 67 . brothers or sisters. outpatient and inpatient investigations in the participating hospitals in each city. b) Purchase additional mediclaim Provide extra cover for your family which includes your spouse.000 mediclaim plus a critical illness cover Rs. children. the best of medical care would cost you less. Discounts at participating hospitals With this card.Whats more. be it your spouse. children. Whats more. Give your family the extra protection a) Add-on Float Cover You have the option of extending the Rs. Top of Form Bottom of Form 3.mediclaim facility at any of the networked hospitals of the Third Party Administrator (TPA) in any city.5 lakhs cover to the add-on cardholders. you can get tax break under Section 80 D of the Income Tax Act. brothers or sisters by purchasing additional mediclaim at fabulous discounts of more than 50%. 2.1. parents. Get fabulous discounts on annual health check-ups. 4. Preferred partners for a healthy life HDFC Bank Health Plus Credit card offers unique discounts and offers from leading health and fitness related brands .

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

and expanded into Mozambique in 1894. Zimbabwe. the Colesberg Bank. Botswana. In Asia the Chartered Bank expanded opening offices including Myanmar in 1862. Over time. in 1911 and Uganda in 1912. proved the most difficult and the branches soon closed. Zanzibar and the Democratic Republic of Congo (D. During 1904 a branch opened in Vietnam. Tanzania in 1993 71 . 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. Botswana in 1897. Both the Chartered and the Standard Bank opened offices in New York and Hamburg in the early 1900s. South Africa. the British Kaffarian Bank and the Fauresmith Bank. in 1863. Over the following decades both the Standard Bank and the Chartered Bank printed bank notes in a variety of countries including China. Cambodia and Iran in 1992. Of these new businesses. the Philippines in 1872. Zanzibar and the D. Malaysia and even during the siege of Makeking in South Africa. Standard Chartered in the 1990s Even within this period of apparent retrenchment Standard Chartered expanded its network. half the output of the second largest goldfield in the world passed through the Standard Bank on its way to London. South Africa. Pakistan and Indonesia in 1863.C.R. It pursued a policy of expansion and soon amalgamated with several other banks including the Commercial Bank of Port Elizabeth. The Chartered Bank gaining the first branch licence to be issued to a foreign bank in New York. Kenya. Malawi in 1901.C. In 1892 the Standard Bank opened for business in Zimbabwe. re-opening in Vietnam in 1990.Century. Japan in 1880 and Thailand in 1894. 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.). 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. Malaysia in 1875. Zambia in 1906. 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.R.

With the opening of branches in Macau and Taiwan in 1983 and 1985 plus a representative office in Laos (1996). Standard Chartered Nigeria Limited in Lagos. where we have a strong and established presence and where we see our future growth. Standard Chartered also opened a new subsidiary. 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. Peru and Venezuela. the Middle East. In 1999. Standard Chartered acquired the global trade finance business of Union Bank of Switzerland. South Asia.000 people in over 500 offices in more than 50 countries primarily in countries in the Asia Pacific Region. and agreed terms to acquire 89 per cent of the share capital of Metropolitan Bank of the Lebanon. Standard Chartered today Today Standard Chartered is the world's leading emerging markets bank employing 30. 72 . These acquisitions demonstrate Standard Chartered firm committed to the emerging markets. In 1998 Standard Chartered concluded the purchase of a controlling interest in Banco Exterior de Los Andes (Extebandes).and Myanmar in 1995. acquired 75 per cent of the equity of Nakornthon Bank. Thailand. Africa and the Americas. Standard Chartered now has an office in every country in the Asia Pacific Region with the exception of North Korea. This acquisition makes Standard Chartered one of the leading clearers of dollar payments in the USA. an Andean Region bank involved primarily in trade finance. With this purchase Standard Chartered now offers full banking services in Colombia.

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. 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.349 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. 2 onwards) Supplementary Multiple NIL NIL Rs. CARD FEE DETAILS Primary Entrance fee NIL Annual fee (Yr. Rs. 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.499 (Yr.349 1) Renewal fee Rs. Standard Chartered VISA Mini Cards cannot be used at merchants requiring a manual imprint of a card to complete a transaction. In particular.199 Rs.349 73 .199 Rs.STANDARD CHARTERED CREDIT CARDS.

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

000 supplementary card (no 1000 500 350 250 75 .• 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 60.00. Minimum age limit: 21 years.50.000 1.000 72. 1.50.000 Annum) INR Rs.000 1. • Multiple Card to segregate your personal and business expenses Eligibility: • For individuals.000 60.00.000 72. 1. 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.

All our branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes.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. 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 . Our business is more than banking because we touch the lives of people anywhere in many ways. Our commitment to nation-building is complete & comprehensive.

          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 .

        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.P.S Demat Services ATM Services Internet Banking 79 .T.E.

The year 2003-04 was the 2nd full year of operations for the Company. being 74% of their share capital. The Bank holds equity of Rs. 80 .50 crore in SBI LIFE.73 crore during the last financial year.        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. It emerged as the top private insurer in terms of number of lives covered with a market share of about 14%. SBI LIFE leveraged the strength of its parent bank and its group.400 branches of SBI Group. recording a 200% premium growth. As at end-March 2004.225 crore for the year 2003-04 as against the premium receipt of Rs. SBI LIFE has also been slowly and steadily strengthening alternate channels including Agency channel. SBI LIFE is now selling its insurance products through 2. SBI and its Associate Banks became the Corporate Agents of SBI LIFE.129. It received a premium income of Rs. SBI LIFE covered nearly 14 lakh lives.

SBI Card Online.75%. SBI card Alerts. 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. Cash access at 810. becoming a part of the SBI family is not just easy but also very attractive. VISA emergency services in 75 countries GLOBAL CONVENIENCES • • • • • • Flexibility Protection Plus No Transaction Fee for the purchase at IOC/IBP pumps. And what’s more.000 VISA ATMs around the globe and from 5500 VISA ATMs. 81 . 3%-5% off on air tickets Balance transfer facility @1. this beneficial rate of interest is applicable for a full 6 months of your becoming a part of the SBI family.INTRODUCTION OF SBI CREDIT CARD THE POWER OF SBI CARD • • • Accepted at 30 million VISA outlets across the world. 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. e-statement. over 1575 SBI ATMs & 251 SBI card Cash Points in India.75% for the Sterling Silver Card and 1.50% in case of a Solid Gold Card.

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

you need to have a minimum of 150 points. Simply call our Call Center Executive and make your request. The redemption of reward points will be done annually. annual. without compromising on your needs. 30.accepting establishments worldwide. an annual spend of Rs. 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. Reward points are awarded for all types of transactions. This incredibly powerful feature has been developed keeping your needs in mind.000 on a True Blue Card ensures that the renewal fee for the next year is less by Rs 300. 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. The Sterling Silver and Solid Gold Card are accepted globally by over 18 million VISA card . SELF SET LIMIT The SBI Card ensures that you are in charge at all times. renewal) balance transfers and service charge transactions. Unused points will be credited to your card account in blocks of 25 points. WIDE ACCEPTANCE Your SBI Credit Card is affiliated to VISA and is welcomed at all Visa Merchant Establishments. (joining. 83 . Thus for example. first against your renewal fees. Your credit limit can be changed on-line and will come in to force from the next billing cycle.To begin redeeming your reward points. except fee.

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

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

and the POS terminal reading the smart-card chip on the card. while debit cards are generally associated with an individual's bank account. There are also forms of debit cards (e. Debit cards. The parent retains a great deal of control over the teen's use of the cards.g. In many countries. also. Visa and MasterCard recently agreed to settle the largest of these lawsuits and agreed to settlements of billions of dollars. Visa Buxx) that are purchased by parents for teens as young as 13. 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. The fees charged to merchants on "credit" debit card purchases -. or unauthorized use while stored value cards usually do not. 86 . 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. and secured credit cards. 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.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. to the extent that cardholder-present transactions will soon not be possible in these countries without knowledge of a PIN. from the merchant's standpoint. They are different in that stored-value cards are generally anonymous. Other differences are that "debit" purchasers may opt to withdraw cash in addition to the amount of the debit purchase.and many POS terminals at PIN-accepting merchant locations now make the "credit" function more difficult to access."debit" transactions. the merchant pays lower fees on a "debit" transaction as compared to "credit" transactions. Debit cards usually offer some protection against loss.

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

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

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

It can be used at over 235 ATMs in India and over 530. If your card is lost or stolen. Delhi.000 ATMs worldwide. Pune and Ahmedabad. Bangalore.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. report it immediately to your bank. Don’t throw them in public trashcans or even in your own trash without first shredding them. For transactions at Visa/PLUS ATMs the following charges apply: Domestic Visa/PLUS ATM locations : Cash Withdrawals: Rs55/. Memorize your PIN and do not write it on your card. or you suspect it is being used fraudulently.and Balance Inquiries: Rs10/International Visa/PLUS ATM locations : Cash Withdrawals: Rs110/.500 establishments in Bangalore alone. If your card is lost or stolen.000 ATMs across the globe. Calcutta. The Card can also be used as an ATM Card at more than 463.000 establishments in India including 1. Crooks are known to "dumpsterdive" for documents that have account numbers and other personal information. 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. close your account and ask your bank for a new account number and PIN. 90 .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. Chennai. Hyderabad. Hold on to receipts from your debit transactions.

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

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

which resulted in inflated growth rates as is typical for a newly emerging sector. First. 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. it is interesting to note that cobranded cards have received a warm reception in India. Additionally. 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. It is. however. expected that this constraint will be partially overcome in the future as the advent of technology drives the costs of these terminals down. 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. SMART CARDS EXPECTED IN THE FUTURE Euromonitor predicts that there remains great potential in India's financial cards in the 2005-2010 forecast period. Industry sources are confident that co-branded cards will emerge strongly in the future in India. when consumers dine out in smart restaurants or when they purchase air tickets for travelling. as the consumer base for the different financial cards sectors grows bigger over the 93 . CO-BRANDED CARDS WELL RECEIVED Similar to other countries in the Asia-Pacific region. Indeed. e-purse cards only had a significant presence from 2001.distribution network of terminals accepting credit 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). credit cards are likely to be used for the payment of school fees and hospitalisation fees in future. among others. regular patrons of these third parties would enjoy discounts and other priorities that they would not get with other cards. 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). For example. This is slightly slower than the 65% CAGR clocked in the review period for several reasons. Second. For instance.

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

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

and many others are doing great service to people in shape of credit cards. Union. while most in the card industry bemoan the lack of a smart card culture in India. excluding store/gas credit cards. Bank Alflah. 12 per cent in Taiwan to US$ 18 billion. rising 4 per cent and 6 per cent. and Hong Kong's increased five per cent to seven million. Visa spending has risen to US$ 275 billion in Asia/Pacific till 13 April 2004.429. respectively. The states with the lowest average bank credit card outstanding per household in the $3. Idaho and Nevada posted the strongest gains in bank credit card outstanding in 2003. where card numbers rose 38 per cent to 10 million.6 billion) in November 2004. Texas was the only one to come in below the national average. and North Dakota. India is currently witnessing large-scale adoption of credit cards. which is on the rise. China has issued 700 million bankcards. Among other major Asia Pacific markets. albeit more amongst the urban populace. 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. Common shoppers spent a record £11. and a host of utility providers are coming up with various kinds of plastic cards. grew a mere 2. Britons currently owe a total of £52.92 billion on their credit cards. CITI Bank. The state-by-state breakdown was based on total bank credit card 96 .CREDIT CARDS: THE NAME OF CONVENIENCE The Standard Chartered. Impressive growth was also achieved in the Philippines. As a result. MCB. The fastest percentage growth was in India where the number of cards on issue increased by 83 per cent to 16 million. and Thailand.5 per cent last year to $6. HBL. Among the five most populous states. Kentucky. Australia's rose one per cent to 11 million. In US the average general-purpose credit card outstanding per household. the credit card spending rose 12 per cent in Australia to US$ 61 billion. Now SBP has enhanced the credit card limit up to Rs2 million. The number of Visa-branded cards on issue rose in every Asia Pacific market except Korea. 6 per cent in Hong Kong to US$ 14 billion and 25 per cent in New Zealand to US$ 6 billion. ranking first in the world in the growth of its bankcard business. Taiwan's card numbers grew 19 per cent to 22 million.400 range were Mississippi. UBL.56 billion ($20.

the worldwide volume of smart cards has increased five-fold to 1. DEBIT GROWTH OUTPACES CREDIT Growth in spending on debit cards once again outpaced that of credit cards.3 million households at year-end 2003.9 billion cards. Being developed in Beijing are electricity meters activated by prepaid cards. Hong Kong: The new ComPass Card rewards bonus dollars immediately upon every purchase. China: On Hainan Island. In Hong Kong.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. test cards are equipped to record social service benefits. especially after the country's decision to issue smart cards to every citizen. MasterCard. China is slated for high growth with about 750 to 800 million smart card users. In six years. Discover. all citizens availing bus and metro services are provided with smart cards 97 . and American Express outstanding of $677 billion and 105. RISE TO SMART CARDS A smart card has a microchip. Pay phone users. While spending on debit cards in Asia Pacific currently remains a fraction of that on credit cards. compliment the high user base. which enables it to store more information and perform more functions than the magnetic-stripe card. and are prey to the extremely high costs associated with informal and unregulated lending sources. who account for almost 75 per cent of the total smart card user base. globally the two segments are approximately equal and significant growth is expected in debit volume in the coming years.

Bhopal: About 2. At NTT. India's numbers pale in comparison to other markets in Asia Pacific (the region contributes almost 40 per cent of worldwide smart card sales. and with an approximate year-on-year growth of 45 per cent. which contain their medical history. Sugarcane farmers too use similar cards 98 . Thailand: Thai Farmers Bank ATM cards can also be used to obtain health and emergency services.Japan: More than 11 million cards are in use. they work both as credit cards and keys to the company gym and other facilities. Perineum cards. Loyalty Cards. and is likely to reach Rs 37.00. a village in members of the women's co-operative society has been using smart cards to maintain their milk delivery and payment records.000 victims of the 1984 Bhopal gas tragedy have been issued smart cards. Hong Kong and Japan. The smart card industry in India is currently pegged at around Rs 50 crore. Philippines: Top local credit-card issuer Bankard has launched an installment card for low-income users. India has close to 8 million smart card users. ARY cards. and purchase-incentive points. Doctors can thus access their health data at the touch of a button Rajasthan: In Nayla. Phone card and many more are in practice in the country India: There is influx of a variety of smart cards.000 crore by the year 2010. 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. second only to Europe like China. At present. 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. Pakistan: Medicards.

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

public transport companies can introduce variety of smart cards. you end up making payments after almost 50 days. Great:::::isn't it? I would say it would rather be cruel to take money through credit cards 100 . 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.POTENTIAL USERS The first potential users for smart cards will be car owners. because they have to make regular fuel purchases. In our country loyalty cards are being used to have petroleum and diesel. 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. The second largest base would be the user of mass transportation where the average purchase size is between Rs5 to Rs200. Pakistan Railways. you do not think twice before spending.

do it within your means. It’s difficult to change a habit and using a card would then be a habit for the one who starts using it regularly. The more you have the richer you are?? The glory is oh so painfully short lived. You are. All credit does is give you the leverage over your current financial situation to spend more than you can with your own money. the better option would be to go for a Debit Card. But the buck (literally) stops there. One careless extravagant moment and you could spend the rest of your life paying for it. so is credit. Use your discretion before you decide to pull out the plastic. As compared to a credit card. Ah the temptations of a credit card. Again in a habit you always raise the level of wrong consumption. 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. Credit isn’t your worst enemy.e. 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 . 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. Just like anything else in moderation is good. Unless you have a compelling reason to buy whatever it is you need.from the person who does not even earn the amount. So keep those urges down. If he goes bankrupt or does not get a monthly salary. imagine the level of mental disorder the person could go through especially when he has the entire family to handle too. which he is now spending. where you just need to take care of the fact that you have enough amounts in your bank account to use it. which is the same when you start using a card. I would recommend going easy on your extra capital. If you decide to splurge. Whenever you use it. LIMITATION As this project of mine is based on the financial product i.

3 Several has been found in recent past about the mishappening and forgery of the cards. 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 . how it is beneficial to them so finally we can say the less awareness of this product in between the customers. 2 Even who are using this facility most of them are afraid about the services that are being provided by the facilitators. what it is. 4 The changing services and the interest rates are also the cause. which are participating in customer dissatisfaction. how it works. CONCLUSION With respect to the secondary data collected I have reached to the following conclusions in my project.1 The customers having very less idea about the plastic money.

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 . Debit cards may be more readily accepted than checks.Since many customers are increasing and so the number of defaulters also. especially in other states or countries as one need not verify the authenticity of the payment and the merchant is assured of immediate payment. Due to the increase in tendency of non repayments the bad debts of bank keep on increasing. To add the popularity of the card and to increase the numbers of users the banks are more liberalized in attracting new consumers. 103 . 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. 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.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.

com Creditreporting. **BIBLIOGRAPHY** Websites : Magazines: 104 .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 Indiainfoline.

Business world India Today 105 .

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