CHAPTER – I

INTRODUCTION

1
 INTRODUCTION

The Indian credit card industry is expected to grow at a CAGR of more than 25% during 2020 -
2025 due to the increasing popularity of credit cards and the growing trend of purchasing
products first and paying later. The number of credit card users in India in 2019 touched 52
million. Yet there are only about 3 credit cards for every 100 people in India, when compared to
32 cards in the USA. This shows that there is higher penetration opportunity in India. With
increasing popularity of credit cards, banks are focusing on urban and semi-urban markets in
order to increase their share in the market.

A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay
a merchant for goods and services based on the cardholder's promise to the card issuer to pay
them for the amounts plus the other agreed charges. The card issuer (usually a bank) creates
a revolving account and grants a line of credit to the cardholder, from which the cardholder can
borrow money for payment to a merchant or as a cash advance.
A credit card is different from a charge card, which requires the balance to be repaid in full each
month or at the end of each statement cycle. In contrast, credit cards allow the consumers to
build a continuing balance of debt, subject to interest being charged. A credit card also differs
from a cash card, which can be used like currency by the owner of the card. A credit card differs
from a charge card also in that a credit card typically involves a third-party entity that pays the
seller and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer
until a later date. In 2018, there were 1.122 billion credit cards in circulation in the U.S
Early credit cards in the U.S., of which BankAmericard was the most prominent example, were
mass-produced and mass mailed unsolicited to bank customers who were thought to be good
credit risks. They have been mailed off to unemployable people, drunks, narcotics addicts and to
compulsive debtors, a process President Johnson's Special Assistant Betty Furness found very
like "giving sugar to diabetics". These mass mailings were known as "drops" in banking
terminology, and were outlawed in 1970 due to the financial chaos they caused. However, by the
time the law came into effect, approximately 100 million credit cards had been dropped into the
U.S. population. After 1970, only credit card applications could be sent unsolicited in mass
mailings.
Before the computerization of credit card systems in America, using a credit card to pay at a
merchant was significantly more complicated than it is today. Each time a consumer wanted to
use a credit card, the merchant would have to call their bank, who in turn had to call the credit
card company, which then had to have an employee manually look up the customer's name and
credit balance. This system was computerized in 1973 under the leadership of Dee Hock, the first
CEO of Visa, allowing transaction time to decrease substantially to less than one minute.
However, until always-connected payment terminals became ubiquitous at the beginning of the
21st century, it was common for a merchant to accept a charge, especially below a threshold
value or from a known and trusted customer, without verifying it by phone.
Books with lists of stolen card numbers were distributed to merchants who were supposed in
any case to check cards against the list before accepting them, as well as verifying the signature
on the charge slip against that on the card. Merchants who failed to take the time to follow the
proper verification procedures were liable for fraudulent charges, but because of the cumbersome

2
nature of the procedures, merchants would often simply skip some or all of them and assume the
risk for smaller transactions. The respondents are required to answer

45 questions of which first eight are of descriptive type on nominal scale and the last five are

related to demographic characteristics of these respondents. The rest 32 are statements which

are designed to reflect the credit card usage behavior of these people. The study consists of

five parts. The first part is an introduction where the history of credit cards in Turkey together

with the scope and the purpose of the study are concisely stated. The second part relates to the

theoretical background of the subject matter and the prior researches carried out so far. The

third part deals with research methodology, basic premises and hypotheses attached to these

premises. Research model and analyses take place in this section. Theoretical framework is

built and a variable name is assigned to each of the question asked or proposition forwarded

to the respondents of this survey. 32 statements or propositions given to the respondents are

placed on a five-point Likert scale where 1 represents strongly disagree; 2 disagree; 3 neither

agree nor disagree; 4 agree and 5 strongly agree. The last five questions about demographic

traits as age, gender, occupation, educational level and monthly income are placed either on a

nominal or ratio scale with respect to the nature of the trait. Six research hypotheses are

formulated in this section. The fourth part mainly deals with the results of the hypothesis tests

and a factor analysis is applied to the data on hand. Here exploratory factor analysis reduces

32 variables to eight basic components. KMO test of sampling adequacy and scale reliability

test proved high scores as 0.891 and 0.696 respectively. In addition non-parametric biraviate

analysis in terms of Chi-Square test is applied to test the hypotheses formulated in this respect.

Bhavesh Gupta, CEO — Paytm Lending said, ―We proudly welcome SBI Card as our partner
to introduce India‘s most sincere credit card with intelligent features and great rewards that never
expire. Our cards are truly designed to benefit India‘s aspiring youth and evolved professionals.
These cards will help them lead a healthier financial life by managing and analyzing their spends
through the Paytm app and make well-informed financial decisions. Our partnership aims

3
towards democratizing access of credit cards amongst the masses. We believe this can transform
the credit market by bringing ‗new to credit‘ users into the formal economy‖ and providing a
truly personalized card management experience to our customers.‖

Talking about the association with Paytm, Ashwini Kumar Tewari, MD & CEO, SBI
Card said, ―The credit card industry in India remains largely underpenetrated. Also, given the
current scenario where social distancing is a way of life and cashless payments are a safer
alternative, there has been a renewed impetus to digital payments from all corners. Our strategic
partnership with Paytm is intended towards making credit cards more accessible to all. Through
this partnership, we will also be able to leverage Paytm`s extensive reach to bring new-age,
digitally evolved consumers across India, a safe, convenient, and rewarding payment solution,
combined with the benefits of a credit card. Further, in an innovative move, we will be
underwriting customers basis their transaction history on Paytm, thereby bringing the Paytm SBI
Card seamlessly to a huge customer base.‖

T R Ramachandran, Group Country Manager, India and South Asia, Visa added, ―We are
delighted to join hands with two of our valued partners in India, SBI Card and Paytm to bring
this unique offering to the market. Besides the relevance of the tap to pay card at times like these,
the premium offers and discounts packaged by the three partners into this card make it an
exciting offering for Indian consumers. We are excited about the prospect of this exclusive
partnership introducing products and solutions to onboard a new generation of Indians to digital
payments.‖

The cards deliver value from the point of enrolment itself, offering welcome benefits like
complimentary Paytm First membership worth Rs 750. Paytm SBI Card SELECT also offers
cardholders Rs 750 cashback upon first use.

We have digitized the entire credit card experience on the Paytm app — from the application
process to tracking & issuance of the credit card. This service offers the flexibility of choosing a
convenient time on the app itself for the collection of documents along with online tracking of
card issuance & delivery. The seamless application process will reduce the rate of application
rejections and will enable more people to participate in the formal credit system.

Benefits of Paytm SBI Card SELECT & Paytm SBI Card

Paytm SBI Card SELECT

 Annual Fees: INR 1,499

 Welcome Benefit Type

a. Complimentary Paytm First Membership worth INR 750
b. INR 750 Cashback

4
  Annual Fee Waiver
Annual Fee reversal on achieving ₹200,000 Annual Retail spend

 Spends based Cashback Benefit Structure

a. 5% Cashback on all Travel, Movies and Mall purchases through Paytm App
b. 2% Cashback on all other purchases through Paytm App
c. 1% Cashback everywhere else

 Fuel
1% Fuel Surcharge Waiver

 Fraud Insurance
Complimentary Cyber Fraud Insurance cover of INR200,000

 International Lounge Program

Complimentary Priority Pass worth US $99 for first two years of cardholder membership

 Domestic lounge Program

Complimentary 4 Domestic Lounge visits (Restricted to 1 per quarter)

 Milestone Benefits
a. INR 2,000 gift voucher on achieving Annual Retail spend of INR 4 Lakh
b. INR 4,000 gift voucher on achieving Annual Retail spend of INR 6 Lakhs

Paytm SBI Card

 Annual Fees: INR 499

 Welcome Benefit
Complimentary Paytm First Membership worth ₹750 on first settled transaction

 Spends based Cashback Benefit Structure

a. 3% Cashback on all Travel, Movies and Mall purchases through Paytm app
b. 2% Cashback on all other purchases through Paytm app
c. 1% Cashback everywhere else

 Fuel
1% Fuel Surcharge waiver

 Fraud Insurance
Complimentary Cyber Fraud Insurance cover of INR 1,00,000

 Milestone Benefits
Complimentary Paytm First Membership E-Voucher on renewal on achieving Annual
Retail spend of INR 1,00,000

5
FAQs

1. How can I apply for Paytm SBI credit card?

Our customers can apply for the Paytm SBI Card and Paytm SBI Card SELECT online through
their Paytm app. Both the cards can be availed at the annual fee of INR 499 and INR 1499
respectively. Customers will also have an option to choose from two-color variants on the Paytm
App.

Due to high demand, we are currently offering these credit cards to select Paytm users only. To
apply
- Log in to your Paytm app
- Select Show More and tap on Loans and Credit Card section
- Users can also search ‗Credit Card‘ in the Paytm Search bar

2. What KYC documents are required to apply for a Paytm SBI Credit Card?
Once the application has been submitted, our users can book for the KYC verification
appointment on the app itself as per their convenience and require the following documents for
submission:
1. Photo ID proof copy
2. Address proof copy (Either current address or permanent address)
3. Passport size photograph
(Please note that in case of any discrepancy, additional documents might be required.)

3. When can I get the card?

Post the KYC document verification, our users will be notified about their card approval/
rejection status in the next 1–2 business days. Once approved, they will receive the card in next
5–7 business days.

4. What is the minimum age to apply for the card?

21 years

5. Is there is a minimum income requirement to apply for the card?

There is no minimum income requirement. Both salaried & self-employed users can apply for
these cards. However, due to high traffic, the applications have been restricted to a limited
audience.

6
 CHAPTER – II
REVIEW OF LITERATURE

7
 REVIEW OF LITERATURE

Theoretical literature on payment cards mainly focus on the distribution of payment card costs in
the network of card issuers, merchants and cardholders. The general implication from these
models (e.g. Rochet and Tirole, 2002; Agarwal, Chakravorti and Lunn, 2010) provide support for
the existence of reward programs: in order to increase card adoption and usage, card issuers may
charge fees to merchants and extend incentives to cardholders. However, most of the conclusions
are dependent on model parameters like the degree of competitiveness in the market for goods
and payment services along with consumer and merchant demand elasticity. Other theoretical
papers focus on those who pay for credit card rewards in equilibrium. For example, Chakravorti
and Emmons (2003) presented a theoretical model of side payment in the competitive credit-card
market and concluded that rewards offered by card issuers should finally be funded by card users
who roll over balances with interest if their subjective discount rates are high enough

Sujit Chakravorti Credit cards provide benefits to consumers and merchants not provided by
otherpayment instruments as evidenced by their explosive growth in the number andvalue of
transactions over the last 20 years. Recently, credit card networks havecome under scrutiny from
regulators and antitrust authorities around the world. Thecosts and benefits of credit cards to
network participants are discussed. Focusing oninterrelated bilateral transactions, several
theoretical models have been constructedto study the implications of several business practices
of credit card networks. Theresults and implications of these economic models along with future
research topicsare discussed

Ausubel, Lawrence M

The bank credit card market, containing 4,000 firms and lacking regulatory barriers,casually
appears to be a hospitable environment for the model of perfectcompetition. Nevertheless, this
article reports that credit card interest rates havebeen exceptionally sticky relative to the cost of
funds. Moreover, major credit cardissuers have persistently earned from three to five times the
ordinary rate of returnin banking during the periods 1983-88. The failure of the competitive
model appearsto be partly attributable to consumers making credit card choices without
takingaccount of the very high probability that they will pay interest on their
outstandingbalances. Copyright 1991 by American Economic Association

Martha SoltSince the 1980s, Visa U.S.A. (Visa) and Master-Card International (MasterCard),
the bank-controlled credit card associations that together account for approximately 70 percent of
today'scredit card market, have been able to control the use of and access to their networks to
theadvantage of their bank members. Recently, however, the credit card industry has
beenchanging: some merchants are now large enough to exert their own leverage, legal
defeatshave impeded the ability of credit card associations to control the market, and
someparticipants have developed new arrangements and alliances that may be a prelude

8
to furtherchanges in the industry. This article surveys recent developments in an industry that
is facingnew competitive dynamics

The question intriguing researchers in the credit card literature is why consumers choose credit
cards over other alternatives, such as cash or debit cards. Stavins (2002) tries to compare the
characteristics between credit card users and individuals preferring other payment instruments,
using data from the 1998 Survey of Consumer Finance (SCF)7 . Their sample contains 21,525
households8 and has a comprehensive coverage of all states in the U.S. The author applies a
weighted logit regression analysis to isolate the effect of individual characteristics on people‘s
likelihood of using specific payment instruments. Results are roughly consistent with general
conjecture that credit card users are more likely to be married, wealthier, better educated, and to
own houses. Though interesting, the finding in this study is hard to be generalized as they are
obtained in only one wave of this survey. In a follow-up study, Klee (2006) examines a longer
period of time (the 1995, 1998 and 2001 waves of SCF) to show the dynamics of these
characteristics associated with credit card use. The primary results suggest that the personal
characteristics that predict credit card use are relatively constant over time, although there have
been significant increases in the payments via credit card from 1995 to 2002. In a more recent
paper, Schuh and Stavins (2013) confirm this by examining the 2008 Survey of Consumer
Payment Choice (SCPC) which administered to sample 1,010 US consumers: the rate of credit
card adoption is higher for older, more educated, high income, wealthier respondents

Another increasingly discussed factor for choosing credit cards is the consumers‘ heterogeneity
in their spending behaviours. For example, credit card revolvers, who regularly carry unpaid
credit card debts, may have different preferences with payment tools in contrast to convenience
users who simply enjoy the convenience and repay their entire credit card balance every month.
Sprenger and Stavins (2008) utilizes survey data specifically tailored to answering the question
of how revolving credit card balances are related to payment method use. The survey was
distributed through either mail or online surveys to 3,008 participants with ages over 18, across
the US in the Spring of 2005. They found that credit card revolvers were significantly more
likely to use debts compared to convenience users. But there were no differences found between
the two types of credit card users in their use of checks or cash. The results should be taken with
caution for application in the current UK credit card market because the sample selection
problem in the survey could impact both the generality and validity of the result. Moreover,
respondents in the survey, on average, had higher levels of education and were more likely to be
middle aged and middle class income groups compared to the US population.

Zinman (2009) supplements this study by investigating how consumers‘ choices between credit
and debit cards respond to the prices of payment instruments. Debit cards offer similar attributes
to credit cards like acceptance, security, portability and time costs. The pecuniary cost of a
marginal credit card charge is the key economic difference between debit and credit for many
households. The data were taken from 1995-2004 Surveys of Consumer Finance which
represents a cross-section of over 2000 US households. The estimate shows that credit card
9
revolvers are at least 21% more likely to use debit cards than convenience users, conditional on a
rich set of proxies for transaction demand and preferences. Moreover, other implicit prices on
credit card payments lead to the more debit card use for credit card revolvers who are facing
relatively high marginal cost on marginal credit card charges or binding credit limit constraint.

The findings in Stavins (2002) and Klee (2006) provide useful implications for both business and
policy applications. Knowing the characteristics of target consumers is the first step for banks (or
card issuers) to set out advertisement strategies or policy makers to implement consumer
protection plans.

10
 CHAPTER – III
RESEARCH METHODOLOGY

11
 NEED OF THE STUDY
 Only charge what you can afford
 Make your payments on time, every time
 Don't just make minimum payments
 Know what to charge -- and what to avoid
 Choose your cards carefully
 Check your statements for problems

OBJECTIVES OF THE STUDY

1. Gain better understanding of the credit card users in India

2. To assess the priorities of credit card users in India.
3. Be informed regarding the top category adoption drivers of credit card users in India
4. Strategize marketing activities, entry into new markets, market expansion and other business
plans by understanding the factors driving growth in the market
5. Understand major competitors' strengths and weaknesses and respond accordingly to benefit
from the market

RESEARCH METHODOLOGY
The method of sampling used was random sampling. The main aim of the study was to cover
employee‘s at all hierarchical levels. Therefore, a sample of respondents was chosen at each
level of hierarchy in all the departments and services. The sample size was taken as 50. The
respondents were from 4 categories as Scientific Staff, Technical Staff, Administrators, and
Supporting Staff.

Respondents
Employee Details Supporting Technical Scientific
Administrators
Staff Staff Staff
Total No. of.
700 100 105 100
Employees
Sample No. of.
20 10 10 10
Employees
Sample selection is random from all the 4 categories.

12
DATA COLLECTION:

Data is recorded measure of phenomena. While deciding about the method of data collection, the
researcher should keep in the mind about two types of data. They are, Primary Data and
Secondary Data.

PRIMARY DATA:
The primary data has been collected through Questionnaire. The Questionnaire has been properly
prepared in order to cover all the information required for the study. This Primary data was also
collected through personal interview and interaction with the officials and staff in the
organization.

SECONDARY DATA:

Secondary data has been collected through the annual reports of the organization & from the
manuals. Some data was collected from the website of the organization (www.hul.com) and
(www.who.com).

The data was also collected from various publications in the magazines like HRM Review, HRD,
sap, people soft , oracle hr payroll process and policy‘s and journal like Indian Journal of
Industrial Relations and the various articles published in them.
COMPANY ADDRESS:

Address:- G2, Ground Floor, AGM Grandeur Nanalnagar, Jn, Rethibowli, Toli Chowki,
Hyderabad, Telangana 500008

SCOPE OF THE STUDY

The credit card users are found in several states of India though mostly in the urban
areas. Looking at the extensive usage of credit cards among the educated group, the investigator
considers that the typical user of cards required to be educated about the various types of credit
cards accessible. This research points to observe the experiences of the credit card users, the
reimbursement that ensue to them and the problems they countenance. The problems that the
credit cards users face in its daily usage. The precautions to be taken by the card users while
using the credit cards. The remedies and the redressal that is available to them in case of loss or
theft of their cards.

13
 LIMITATIONS OF THE STUDY
You can't pay your credit card balance in full and on time: If this tends to happen, stick with the
debit card (or cash) to avoid falling into credit card debt and incurring interest charges.

You tend to spend more than you can afford: Paying with debit will limit you to spending money
already earned.

You can only get a credit card with a low credit limit and you have a hard time staying under the
balance: Exceeding your credit limit results in costly fees, and doing this can also put a dent in
your credit score.

14
 CHAPTER – IV
THEORETICAL FRAME WORK

15
The idea of credit has been around since the beginning of time almost. Credit as we know today
has only been around since the early 20th century. Credit cards today, allow you to purchase
anything anywhere, at any time. These cards are super small, yet mighty, in all that they do and
offer customers. They are such an important part of the financial world.

Convenience Store

About a hundred years ago or so, if some visited their local convenience store often and one day
happened to be short to pay the bill, the store clerk could offer them the items on credit. In small,
close-knit towns this was an okay thing to do because everyone knew each other, and there were
much less people in towns to keep track of.

Diners Club Card

This was the first ever charge card. It was developed when Frank McNamara forgot his wallet
while having a business dinner. His wife picked up the tab that night, but he vowed that he would
never be embarrassed like that again. A year later he returned to the same restaurant and
developed the diners club card. It charged users $5 a year and establishments 7% of each year. It
wasn‘t until 1961 that the plastic Diners Club charge card was introduced to the market. The
charge card balance had to be paid at the end of every month, but this was the start of the credit
card innovation.

Visa/MasterCard

BankAmericard, now known as a Visa credit card, was the very first real credit card. It was first
issued in 1958. This card allowed you to make purchases, and pay back the money over time, not
all at once like charge cards required. The BankAmericard, was named after Bank of America.
Eventually, through a cooperative, banks across the country were able to issue these cards to
their customers. As a result, Visa was born in 1976.

Deregulation

There was a Supreme Court ruling that deregulated the banking systems control of credit cards. It
concluded that national banks could in fact charge consumers in other states the interest rate set
in the bank‘s home state. If you got approved for a Visa card living in Illinois, which originated
in California, you‘d pay California interest rates. However, this caused a lot of banks to move to
states that didn‘t have a cap on interest rates, and they could make them however high they
wanted to.

16
Success of Reward Programs

Citibank was the first bank to offer rewards for using its credit card, it had a partnership with
American Airlines. This one deal, led to every other major credit card company figuring out how
to offer their customers rewards. It also caused people to use their cards more, since they were
being rewarded for it.

Credit Card Reforms

There was a reform package that prevented credit card companies from raising interest rates on
an account‘s current balance. It also prevented credit card companies from changing the interest
rate in the first year of the credit card agreement, unless previously stated.

The Future

Credit cards will never go away. Companies will continuously come up with new rewards
systems and incentives to get people to sign up for them. However, to keep their bottom line
intact, credit card companies only vet the best consumers who will be able to pay off their debts.
It is possible that physical credit card use will grow less and less popular, with things like Apple
Pay, Samsung Pay, etc. it is just so convenient to have everything you need, on your phone.
Credit card companies are also tasked with making sure that their customer‘s private information
is secure at all times, and not just after there is a breach of sorts.

Credit cards have been constantly evolving since it has been mass produced to assist people in
their everyday lives. Nothing in life is constant, so it is likely that they will only continue to
change and get better over time.

The U.S. accounts for more credit card fraud than the rest of the world combined, so it should

come as no surprise that the country is moving to embrace more secure EMV-enabled credit and

debit cards. What may, however, be surprising is that the move began not five or ten years ago,

but at the beginning of October, about a decade or so behind Europe and much of the rest of the

developed world.

EMV is a technology that has virtually eradicated card-present credit fraud elsewhere, but in the

States it‘s off to a tepid start, with neither consumers nor retailers particularly keen on switching

17
out payment cards or investing in new, EMV-compliant terminals. But thanks to new rules that

shift fraud liability from card issuers to retailers, the question of technology adoption is no longer

a matter of ―if,‖ but ―how quickly?‖

As it turns out, the answer to ―how quickly‖ is ―well beyond the deadline,‖ with the mass

migration to EMV underscoring just how difficult it is to replace an estimated 1.2 billion credit

cards and 15.5 million points of sale. Meanwhile, a pressing question remains: with cyber crime

on the rise, what security challenges won’t be solved by EMV?

Until the mid 1990s, all credit and debit card transactions were processed in one of two ways: A)

via the magnetic stripe on the back of the card or B) through a physical imprint of the raised

numbers and text on the front. While the latter method has mostly fallen into disuse, magnetic

swipes are still far and away the most common method for processing transactions in the U.S.

There are a number of security flaws inherent to magnetic swipe transactions. Someone who‘s

learned to forge the signature on a lost or stolen card can easily use it to make purchases and,

often enough, merchants don‘t bother to verify the signature in the first place. In recent years, it‘s

also become increasingly simple for fraudsters to obtain technology enabling them to read a

magnetic swipe at the point of sale, and then copy that information to a blank card, in effect

cloning the user‘s credit card.

Founded in 1994, originally the acronym ―EMV‖ referred to Europay, Mastercard and Visa, who

together created the standard to provide better card security and overcome some of these inherent

challenges. Today it is managed by a consortium called EMVCo, comprising the original

members plus American Express, China Union Pay, JCB and Discover/Diners Club

International.

18
Early success – and U.S. resistance

Practically since day one, EMV-enabled cards have had an enormous impact on credit and debit

fraud worldwide. In France, where an early form of smart cards first appeared in 1992, card

fraud has dropped by more than 80 percent.

―Outside of the U.S. where they‘ve implemented EMV technology, card-present fraud has been

virtually eradicated,‖ said John Bourke, cyber insurance leader, financial institutions for Aon

Risk Solutions. ―Obviously there are other avenues, but it‘s like locking your car. Let the thief

steal the car that‘s open or the one with the keys in the ashtray.‖

MasterCard‘s liability shift for most of Europe occurred on January 1, 2005, while Visa‘s took

place a year later. Many African and Asian countries transitioned around the same time. In every

region where it has been introduced, card fraud has fallen.

Yet despite EMV‘s early success in curbing card-present fraud around the world, American

businesses, banks, card issuers, as well as consumers all resisted the move to new standards. This

can be ascribed to a number of factors, albeit anecdotally. Bourke says the primary reasons were

aversion on the part of retailers to invest in new POS terminals, and fear of alienating customers

by disrupting entrenched transaction habits (i.e. swiping as opposed to dipping).

No silver bullet

While the switch to EMV compliance is sure to reduce card-present fraud in the U.S. as it has in

other countries, it‘s important to note that it‘s far from a catch-call solution. In the UK for

instance, while certain kinds of card fraud dropped 67 percent in the years following EMV

adoption, incidents of card-not-present fraud exploded.Many in fact argue that overall card fraud

is still just as prevalent – it‘s simply shifted to alternate channels.

19
But most strikingly, the U.S. card industry has mandated only chip and signature cards, whereas

the rest of the world utilizes chip-and-pin EMV cards. In effect, this means that EMV protections

will do nothing for lost and stolen cards. The industry defends this by claiming that fraud from

lost and stolen cards makes up a relatively trivial percentage of overall fraud, but some estimates

peg the number as high as 35 percent.

In either case, and in spite of the October 1 deadline, the rollout of millions of new POS

terminals – not to mention the more than 1 billion cards that need to be replaced – is likely to be

a protracted one.

While the U.S. rollout continues, Bourke notes that there are many unanswered questions: What

happens the next time a major case of card-present credit fraud is caused by a non-EMV

compliant terminal? Will credit fraud begin bankrupting retailers? Will the rise of cyber risk –

which entered the top 10 of perceived risks in Aon‘s Global Risk Management Survey for the

first time this year – mean that even EMV begins to be perceived as insecure, and demand for

biometric security begins to rise?

None of this is outside the realm of possibility, but for now, there‘s little to do but wait and

watch as events unfold – while keeping an eye on the emerging hacks that could make even

today‘s improved financial security as safe as a purse with a hole in it, and the emerging

technologies that could make our money more secure than ever before.

―The real problem is that there are still very few EMV-certified solutions available. Merchants

with the most simplistic of point of sale configurations, a cash register and a terminal, can buy

EMV-ready terminals. But these are the same merchants that are most likely to drag their feet

through the upgrade process as the business case is not very strong for low-volume merchants

who don‘t see a lot of chargebacks.‖ – Rick Oglesby, partner at Double Diamond Research

20
―While many of the major retailers transition to new point of sale systems, the question for small

to mid-size retailers is whether or not the benefits of chip technology are reason enough to invest

in new POS terminals immediately. Since this is the first change in credit card technology at

mass scale, we are interested to see if consumers are more apt to utilize the transition time to

explore new payment technologies such as NFC and other contactless payment methods.‖ –

Kevin Levitt, vice president of business development at Credit Karma

―Although EMV cards provide greater security than traditional magnetic strip cards, an EMV

chip does not stop lost and stolen cards from being used in stores, or for online or telephone

purchases when the chip is not physically provided to the merchant, referred to as a card-not-

present transaction. Additionally, the data on the magnetic strip of an EMV card can still be

stolen if the merchant has not upgraded to an EMV terminal and it becomes infected with data-

capturing malware. Consumers are urged to use the EMV feature of their new card wherever

merchants accept it to limit the exposure of their sensitive payment data.‖ – U.S. Federal Bureau

of Investigation

―It does seem somewhat puzzling this didn‘t happen sooner, especially when you consider the

cases where massive retailers have been breached and the issuing banks effectively got stuck

with card reissuance costs, lots of costs that technically they probably did not have to eat. It was

just a matter of time before the banks had to say, ‗Hey, wait a minute.‘ If we‘re not all using the

latest and greatest technology and as a result of that there‘s fraud, then someone‘s got to pay.‖ –

John Bourke, Cyber Insurance Leader, Financial Institutions, Aon Risk Solutions.

21
 CHAPTER – V
COMPANY PROFILE

22
 COMPANY PROFILE
The State Bank of India, the country‘s oldest Bank and a premier in terms of balance sheet size,
number of branches, market capitalization and profits is today going through a momentous phase
of Change and Transformation – the two hundred year old Public sector behemoth is today
stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign
Banks a run for their money.

The bank is entering into many new businesses with strategic tie ups – Pension Funds, General
Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant
Acquisition, Advisory Services, structured products etc – each one of these initiatives having a
huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new banking models, to
expand its Rural Banking base, looking at the vast untapped potential in the hinterland and
proposes to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide
India‘s growing mid / large Corporate with a complete array of products and services. It is
consolidating its global treasury operations and entering into structured products and derivative
instruments. Today, the Bank is the largest provider of infrastructure debt and the largest
arranger of external commercial borrowings in the country. It is the only Indian bank to feature
in the Fortune 500 list.

The Bank is changing outdated front and back end processes to modern customer friendly
processes to help improve the total customer experience. With about 8500 of its own 10000
branches and another 5100 branches of its Associate Banks already networked, today it offers the
largest banking network to the Indian customer. The Bank is also in the process of providing
complete payment solution to its clientele with its over 8500 ATMs, and other electronic
channels such as Internet banking, debit cards, mobile banking, etc.

23
With four national level Apex Training Colleges and 54 learning Centres spread all over the
country the Bank is continuously engaged in skill enhancement of its employees. Some of the
training programes are attended by bankers from banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as internationally. It
presently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in
India – SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI
Cards - forming a formidable group in the Indian Banking scenario. It is in the process of raising
capital for its growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and
take all employees together on this exciting road to Transformation. In a recently concluded
mass internal communication programme termed ‗Parivartan‘ the Bank rolled out over 3300 two
day workshops across the country and covered over 130,000 employees in a period of 100 days
using about 400 Trainers, to drive home the message of Change and inclusiveness. The
workshops fired the imagination of the employees with some other banks in India as well as
other Public Sector Organizations seeking to emulate the programme.The Bank is actively
involved since 1973 in non-profit activity called Community Services Banking. All their
branches and administrative offices throughout the country sponsor and participate in large
number of welfare activities and social causes.

Their business is more than banking because they touch the lives of people anywhere in many
ways. Their commitment to nation-building is complete & comprehensive.

TRANSFORMATION JOURNEY IN STATE BANK OF INDIA:

The State Bank of India, the country‘s oldest Bank and a premier in terms of balance sheet size,
number of branches, market capitalization and profits is today going through a momentous phase
of Change and Transformation – the two hundred year old Public sector behemoth is today
stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign
Banks a run for their money.

24
The bank is entering into many new businesses with strategic tie ups – Pension Funds, General
Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant
Acquisition, Advisory Services, structured products etc – each one of these initiatives having a
huge potential for growth.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide
India‘s growing mid / large Corporate with a complete array of products and services. It is
consolidating its global treasury operations and entering into structured products and derivative
instruments. Today, the Bank is the largest provider of infrastructure debt and the largest
arranger of external commercial borrowings in the country. It is the only Indian bank to feature
in the Fortune 500 list.

The Bank is changing outdated front and back end processes to modern customer friendly
processes to help improve the total customer experience. With about 8500 of its own 10000
branches and another 5100 branches of its Associate Banks already networked, today it offers the
largest banking network to the Indian customer. The Bank is also in the process of providing
complete payment solution to its clientele with its over 8500 ATMs, and other electronic
channels such as Internet banking, debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centers spread all over the
country the Bank is continuously engaged in skill enhancement of its employees. Some of the
training programmes are attended by bankers from banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as internationally. It
presently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in
India – SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI
Cards - forming a formidable group in the Indian Banking scenario. It is in the process of raising
capital for its growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and
take all employees together on this exciting road to Transformation. In a recently concluded
mass internal communication programme termed ‗Parivartan‘ the Bank rolled out over 3300 two
day workshops across the country and covered over 130,000 employees in a period of 100 days
using about 400 Trainers, to drive home the message of Change and inclusiveness. The

25
workshops fired the imagination of the employees with some other banks in India as well as
other Public Sector Organizations seeking to emulate the programme.

The CNN IBN, Network 18 recognized this momentous transformation journey, the State Bank
of India is undertaking, and has awarded the prestigious Indian of the Year – Business, to its
Chairman, Mr. O. P. Bhatt in January 2008.

State Bank of India (SBI) has history of more than 200 years of existence. SBI is the largest
commercial bank in India and accounts for approximately 18% of the total Indian banking
business and the group account for 25% of the total Indian banking business.

• The central bank, Reserve Bank of India (RBI) is the largest shareholder in the bank with59.7%
stake followed by overseas investors including GDRs with 19.78% shareholdingas on September
06. RBI‘s stake in the bank is likely to be transferred to the Governmentof India (GOI).

• SBI has the largest distribution network in India spread across every nook and corner of India.
As on September 06, the bank has 14,061 branches which include 4,755 branches of its
associated banks. The bank also has the largest network of 5,624 ATMs.

26
 CHAPTER – VI
DATA ANALYSIS AND
INTERPRETATION

27
 DEMOGRAPHIC PROFILE OF THE RESPONDENTS

1. AGE GROUP OF THE RESPONDENT

S.NO AGE No. Of respondent Percentage

1 15-24 22 15
2 25-34 38 25
3 35-44 60 40
4 Above 45 30 20
Total 150 100

INTERPRETATION

From the above table it is inferred that 40% of the respondents age group is 35-44, 25% of the
respondents are in the age group is 25- 34, 20% of the respondents are in the age group above
45 and 15% of the respondents are in the age group of 15 -24.

AGE GROUP OF THE RESPONDENTS

AGE
20% 15%
15-24

25-34
25%
35-44

40% Above 45

28
2. GENDER OF THE RESPONDENT

S.NO Gender No. Of respondent Percentage

1 Male 100 33
2 Female 50 67
3 Total 150 100

INTERPRETATION:

From the above table it is inferred that 67% of the respondents are male and 33 %of the
respondents are female.

GENDER OF THE RESPONDENT

80%

70% 67%

P 60%
E
50%
R
C 40%
E 33%
N 30%
T
A 20%
G
10%
E
0%
Male Female

GENDER

29
3. EDUCATION QUALIFICATION OF RESPONDENTS

S.NO Educational No. of respondent Percentage

qualification
1 SSLC 38 25
2 Hsc 32 21
3 Graduate 37 25
4 Diploma 20 13
5 Other specify 23 16
Total 150 100

INTERPRETATION

From the above table it is inferred that 25 % of the respondents completed SSLC & Graduation
respectively, 21% of the respondents completed HSC,13 % of the respondents completed
diploma and 16 %the respondents completed technical courses.

EDUCATION QUALIFICATION OF RESPONDENTS

25% 25%
25%

21%

P 20%
E
16%
R
C 15% 13%
E
N
T 10%
A
G
E 5%

0%
SSLC hsc Graduate Diploma Other specify

EDUCATION QUALIFICATION

30
4. MARITAL STATUS OF RESPONDENTS

S.NO Marital status No. Of Respondent Percentage

1 Married 120 80
2 Un married 30 20
3 Total 150 100

INTERPRETATION

from the above table it is infered that 80%of respondents are married and 20 % of respondents
are unmarried.

MARITAL STATUS OF RESPONDENTS

80%

70%
P
E
60%
R
C
E 50%
N
T 80%
40%
A
G
E 30%

20%

20%
10%

0%
Married Un married

MARITAL STATUS

31
5. Do you use a credit card?

S.NO YES/NO No. Of respondent Percentage

1 YES 75 75
2 NO 25 25
3 Total 100 100

INTERPRETATION:

From the above table it is inferred that 75% of the respondents are Yes and 25 %of the
respondents are No.

80

70

60

50

40 YES
NO
30

20

10

0
No. Of respondent Percentage

32
6. How did you apply for your domestic credit card?

S.NO Applied No. Of respondent Percentage

1 My self 60 60
2 Company applied 20 20
for me
3 Supplementary credit 10 10
card
4 Others 10 10
5 Total 100 100

INTERPRETATION:

From the above table it is inferred that 60% of the respondents applied for credit card by
self and company applied is 20% remaining supplementary and others are 10 & 10 %.

No. Of respondent

My self

Company applied for me

Supplementary credit
card
Others

33
7. What is the highest category of the credit card you are using?

S.NO Highest category No. Of respondent Percentage

1 Silver 70 70
2 Gold 10 10
3 Platinum 10 10
4 Titanium 10 10
5 total 100 100

INTERPRETATION:

From the above table it is analysed that the user for credit card highest category falls
at Silver with 70 & whereas Gold, Platinum and Titanium usage is only 10%, 10%, 10%

80

70

60

50

40 No. Of respondent
Percentage
30

20

10

0
Silver Gold Platinum Titanium

34
8. Are you satisfied with your domestic credit card?

S.NO Levels of satisfaction No. of respondent Percentage

1 Highly satisfied 60 60
2 Satisfied 10 10
3 Neutral 28 28
4 Dissatisfied 1 1
5 Highly dissatisfied 1 1
Total 100 100

INTERPRETATION

From the above table it is inferred that 28% of the respondents are neutral with ,10% of the
respondents are satisfied ,60 % of the respondents are highly satisfied, 1 % of the respondents
dissatisfied , 1 % of the respondents are highly dissatisfied.

70
60
50
40
30
No. of respondent
20
Percentage
10
0

35
9. How much do you approximately spend with your domestic credit card per month?

S.NO Approx spending No. of respondent Percentage

1 Up to 1000 5 5
2 1000-3000 10 10
3 3000-5000 10 10
4 5000-10000 55 55
5 10000 and above 20 20
Total 100 100

INTERPRETATION

From the above the table it is inferred that the person spending approximate is 55
% and 20% were spending for the highest amount, remaining 10 & 10% was spend on the 1000-
5000, the 5 % were given 1000.

No. of respondent

Up to 1000
1000-3000
3000-5000
5000-10000
10000 and above

36
10. How many times do you use your domestic credit card per month?

S.NO Usage No. of respondent Percentage

1 Upto 4 times 10 10
2 4-6 times 20 20
3 6-10 times 20 20
4 More than 10 times. 50 50
5 Total 100 100

INTERPRETATION

From the above table it is analysed that the repsondents and the percentage for the
usage of credit card in a month for more than 10 time were 50% , 20 & 20 % were for 4-10 times
and the remaining were 10 %.

60

50

40

30 No. of respondent
Percentage
20

10

0
Upto 4 times 4-6 times 6-10 times More than 10
times.

37
11. Do you intend to apply for another domestic credit card in the next 12?

S.NO YES/NO No. Of respondent Percentage

1 YES 75 75
2 NO 25 25
3 Total 100 100

INTERPRETATION

From the above table it is analysed that the percentage for yes 75 % and for No it is
25%

80

70

60

50

40 YES
NO
30

20

10

0
No. Of respondent Percentage

38
12. When you use your credit card, what do you spend the most money on?

S.NO Area of spending No. Of respondent Percentage

1 Shopping mall 60 60
2 Restaurant 10 10
3 Online payment 15 15
4 Flight tickets 10 10
5 Health sports 5 5
total 100 100

INTERPRETATION

From the above table it is analysed that the respondent who use credit card for
shopping is 60%, restaurants were 10%, online payment are 15%, flight tickets were 10 and last
health were 5%.

No. Of respondent

Shopping mall
Restaurant
Online payment
Flight tickets
Health sports

39
13. In which of the following media do you often find advertising for your credit card?

S.NO Advertisement No. Of respondent Percentage

1 Online 70 70
2 Bank mail 10 10
3 Newspaper 5 5
4 Magazines 5 5
5 Friends and relatives 10 10
total 100 100

INTERPRETATION

From the above table it is analysed that the respondent who find advertisement of
credit card through online is 60%, bank mail were 10%, newspaper are 15%, magazines were 10
and last friends and relatives were 5%.

80
70
60
50
40
30
No. Of respondent
20
10 Percentage
0

40
14. When you select a credit card, what are you more concerned about?

S.NO Concern No. Of respondent Percentage

1 High credit limit 20 20
2 Discounts 10 10
3 Attractive gifts for 1st 10 10
purchase
4 Types and value of 10 10
reward gift
5 Lost card protection 20 20
6 Fees for credit card 10 10
7 Online payment 20 20
safety
Total 100 100

INTERPRETATION

From the above table it is analysed that the respondent were 20% high credit card
limit, 10, 10, 10% for discount attractive gifts , 20 % for lost card protection and 10, 20% for fee
and online payment.

25
20
15
10
5
No. Of respondent
0
Percentage

41
15. What are the benefits of your domestic credit card in your opinion?

S.NO Concern No. Of respondent Percentage

1 Online 40 40
2 No cash 20 20
3 Credit card 20 20
instalment
4 Buy advance 10 10
5 Credit card points 10 10
6 Total 100 100

INTERPRETATION

From the above table it is analysed that the respondent were 20% high credit card
limit, 10, 10, 10% for discount attractive gifts , 20 % for lost card protection and 10, 20% for fee
and online payment.

No. Of respondent

Online
No cash
Credit card instalment
Buy advance
Credit card points

42
 CHAPTER – VII
RESEARCH FINDINGS &
SUGGESTIONS

43
 RESEARCH FINDINGS & SUGGESTIONS

 From the above table it is inferred that 40% of the respondents age group is 35-44, 25%
of the respondents are in the age group is 25- 34, 20% of the respondents are in the age
group above 45 and 15% of the respondents are in the age group of 15 -24.
 From the above table it is inferred that 67% of the respondents are male and 33 %of the
respondents are female.
 From the above table it is inferred that 25 % of the respondents completed SSLC &
Graduation respectively, 21% of the respondents completed HSC,13 % of the
respondents completed diploma and 16 %the respondents completed technical courses.
 from the above table it is infered that 80%of respondents are married and 20 % of
respondents are unmarried.
 From the above table it is inferred that 75% of the respondents are Yes and 25 %of the
respondents are No.
 From the above table it is inferred that 60% of the respondents applied for credit card by
self and company applied is 20% remaining supplementary and others are 10 & 10 %.
 From the above table it is analysed that the user for credit card highest category falls at
Silver From the above table it is inferred that 28% of the respondents are neutral with
,10% of the respondents are satisfied ,60 % of the respondents are highly satisfied, 1 % of
the respondents dissatisfied , 1 % of the respondents are highly dissatisfied. with 70 &
whereas Gold, Platinum and Titanium usage is only 10%, 10%, 10%
 From the above the table it is inferred that the person spending approximate is 55 % and
20% were spending for the highest amount, remaining 10 & 10% was spend on the 1000-
5000, the 5 % were given 1000.
 From the above table it is analysed that the repsondents and the percentage for the usage
of credit card in a month for more than 10 time were 50% , 20 & 20 % were for 4-10
times and the remaining were 10 %.
 From th From the above table it is analysed that the respondent who use credit card for
shopping is 60%, restaurants were 10%, online payment are 15%, flight tickets were 10
and last health were 5%.e above table it is analysed that the percentage for yes 75 % and
for No it is 25%

44
 From the above table it is analysed that the respondent who find advertisement of credit
card through online is 60%, bank mail were 10%, newspaper are 15%, magazines were
10 and last friends and relatives were 5%.
 From the above table it is analysed that the respondent were 20% high credit card limit,
10, 10, 10% for discount attractive gifts , 20 % for lost card protection and 10, 20% for
fee and online payment.

45
 CHAPTER –VIII
SUGGESTIONS &
RECOMMENDATIONS

46
 SUGGESTIONS

 From the above table it is inferred that 60% of the respondents applied for credit card by
self and company applied is 20% remaining supplementary and others are 10 & 10 %.
 From the above table it is analysed that the user for credit card highest category falls at
Silver From the above table it is inferred that 28% of the respondents are neutral with
,10% of the respondents are satisfied ,60 % of the respondents are highly satisfied, 1 % of
the respondents dissatisfied , 1 % of the respondents are highly dissatisfied. with 70 &
whereas Gold, Platinum and Titanium usage is only 10%, 10%, 10%
 From the above the table it is inferred that the person spending approximate is 55 % and
20% were spending for the highest amount, remaining 10 & 10% was spend on the 1000-
5000, the 5 % were given 1000.
 From the above table it is analysed that the repsondents and the percentage for the usage
of credit card in a month for more than 10 time were 50% , 20 & 20 % were for 4-10
times and the remaining were 10 %.

47
 RECOMMENDATIONS

One good credit card may be a great help in cases of emergency or immediate financial needs.
Need to buy something but your wallet is empty of cash? Not a problem! Having a credit card
can get you out of an immediate jam. Are you attempting to build a good credit score? You can
do it with a credit card! Continue perusing this piece to gain practical information about bank
cards.

Keep up with your credit card purchases, so you do not overspend. Getting carried away with
credit card spending is easy, so keep careful track each time you use it.

Always pay credit payments before they are due. This increases your credit score. If you don‘t do
this, you could incur costly fees and harm your credit score. Using automatic payment features
for your credit card payments will help save you both money and time.

CREDIT CARD

Make sure you know the current interest rate of the credit card you are applying for. It is
extremely important before you sign on to getting that credit card that you must know the interest
rate. If you are unaware of the number, you might pay a great deal more than you anticipated.
It‘s always a good idea to pay off your credit card in full every month, but this may be
impossible if you are paying more than you expected.

If you run into financial difficulty, let your credit card company know. You may be able to adjust
your payment plan so that you won‘t miss a credit card payment. Most companies will work with
you if you contact them in advance. This may stop them from turning in a late payment to the
major reporting agencies.

Many times, credit cards are associated with loyalty programs. If you use credit cards on a
regular basis, it is wise to find one with a loyalty or rewards program that you find personally
useful. These programs can provide a source of income, when they are used wisely.

48
BIBLIOGRAPHY

49
 BIBILIOGRAPHY

 Klein, Lloyd. It's in the cards: consumer credit and the American experience (Greenwood
Publishing Group, 1999);
 Lee, Jinkook, and Kyoung‐Nan Kwon. "Consumers‘ use of credit cards: Store credit card
usage as an alternative payment and financing medium." Journal of Consumer Affairs 36.2
(2002): 239-262.
 Mandell, Lewis. The credit card industry: a history (Twayne Publishers, 1990).
 Manning, Robert D. Credit card nation: The consequences of America's addiction to
credit (Basic Books, 2001).
 Marron, Donncha. Consumer credit in the United States: A sociological perspective from the
19th century to the present (Palgrave Macmillan, 2009).
 Montgomerie, Johnna. "The financialization of the American credit card
industry." Competition & Change 10#3 (2006): 301-319.

50
QUESTIONNAIRE

51
 QUESTIONNAIRE

1. Name :

2. Age group :15-24 25-34 35-44 45-54 above54

3. Gender : Male Female

4. Education qualification : SSLC HSC Graduate Diploma

Other specify

5. Marital status : Married Unmarried

6. Do you use a credit card?

Yes No
7. How did you apply for your domestic credit card?

A) By myself

B) My company applied for me

C) I use a supplementary credit card

D) Other

8. What is the highest category of the credit card you are using?

A) Silver

B) Gold

C) Platinum

D) Titanium

9. Are you satisfied with your domestic credit card?

1 Highly satisfied

2 Satisfied

3 Neutral

4 Dissatisfied

5 Highly dissatisfied

52
10. How much do you approximately spend with your domestic credit card per month?
A) Up to 1000
B) 1000-3000
C) 3000-5000
D) 5000-10000
E) 10000 and above

11. How many times do you use your domestic credit card per month?

1 Upto 4 times
2 4-6 times
3 6-10 times
4 More than 10 times.

12. Do you intend to apply for another domestic credit card in the next 12?

Yes No
13. When you use your credit card, what do you spend the most money on?

1 Shopping mall

2 Restaurants

3 Online payments

4 Flight tickets

5 Health sports

14. In which of the following media do you often find advertising for your credit card?

1 Online

2 Bank mail

3 Newspaper

4 Magazines

5 Friends and relatives

53
15. When you select a credit card, what are you more concerned about?

1 High credit limit

2 Discounts

3 Attractive gifts for 1st purchase

4 Types and value of reward gift

5 Lost card protection

6 Fees for credit card

7 Online payment safety

16. What are the benefits of your domestic credit card in your opinion?

1 Online
2 No cash
3 Credit card instalment
4 Buy advance
5 Credit card points

54