Indians Hold 191.21 Mn Plastic -Debit + Credit Cards

We were consulting for an online project and hence wanted to know how many Indians actually own Credit Card and Debit Cards. Together [Debit + Credit], 191.21 Mn Plastic Money Cards has been issued by all the banks in India[Single User may have Multiple Cards] but we get an approximation that at least 17% of the Billion people can now shop using Plastic.

The break up Debit Cards vs Credit Cards in Cirulation is as follows,
Debit Cards - 170.56
Credit Cards - 20.64

Credit Card Data:
Credit Card is either Visa or Mastercard which is the most popular and in some instance American Express.

The Top 10 Credit Card Issuers in India are as follows,
ICICI Bank - 5.07 Mn
HDFC Bank - 4.42 Mn
SBI Cards - 2.65 Mn
Citibank - 2.54 Mn
HSBC Cards - 1.3 Mn
StanChart Credit Cards - 1.1 Mn
ABN Amro - 0.78 Mn
Axis Bank - 0.57 Mn
Deutsche Bank - 0.495 Mn
American Express - 0.45 Mn

For complete data, you can e-mail me to feedback AT cardBhai Dot Com

Data Courtesy - The Reserve Bank of India

Size of Debit + Credit Card Market in India

We at CardBhai continuously use lot of data from RBI for internal Research Purpose. Excerpts of this research is made available to you.

During the Last Financial Year - Apr-2009 to March-2010, Indians spent a total of Rs 62,872.23 cr [USD 13.97] on Credit Cards and Rs 26,172.45 cr [ USD 5.81 Bn] using their Debit Cards. Most of the transaction was reported on VISA and MASTERCARD. Debit Card Purchases saw big leap from USD 4.1 Bn in FY 2008-09 to USD 5.81 Bn in FY 2009-10.

The Total Plastics Card Market in India during the last Financial Year was USD 19.78 Bn marginally up from USD 18.64 Bn in FY 2008-09.

Additionally, we wanted to know the size ticket of each of the transactions. Data from RBI suggests us that - The Average Credit Card Transaction was worthy of Rs 2676.54 up from Rs 2517.52 in FY 2008-09. The Average Debit Card Transaction was worthy of Rs 1553.26 up from Rs 1453.52 in FY 2008-09.

Indian still transact a lot in Cash due to the failure on the part of successive Governments to encourage an ecosystem for e-money and curb blackmoney, which is running as a parallel economy with support from vested interests within the Government.

CIBIL Defaulters & Clean History, Why not ?

Since the CardBhai Forum was opened for participation, we have received lots of queries on help for settlement of Credit Cards / Personal Loans. Today I would like to enlighten readers on why RBI & Credit Institutions are unlikely to clean your name from the Credit Information Companies - CIBIL Records even after Settlement.

First, you should know that Credit Cards and Personal Loans are Unsecured Debt [Loans without any Security]. RBI gives a Free hand to Banks to charge any interest rate on these instruments. Most Credit Cards have variable interest rate between 24%-48% P.A.

Additionally, there was an element of Doubt on Credit Status of Accounts Settled after Default. Banks are Reporting those accounts as "Written OFF" to CIBIL. There is a valid reason on why Banks do it and it is because, when your credit card bill is generated, the bank will have "X" amount as receivable. However, if you do a settlement for Rs "X" - 5,000, the difference still remains in Receivable and Accounting Practices doesn't allow that to be adjusted, so it has to get into "Written OFF".

Why Banks / RBI unlikely to be Soft on Consumers ?
Apart from the above said reason, if Banks and RBI come to a consensus to clean consumer history after Settlement [at amount less than what you owe], every Credit Card Borrower will start making use of this loop hole. Hence, banks have raised serious objections and RBI is finding a way to this issue.

So How do you proceed ? Only Advise is , pay off the entire amount, close the account and never seek such risky credit until the issues raised by CardBhai are resolved. Or, negotiate hard during settlement and include the clause that "STATUS" will NOT be reported as any of the following - Suit filed, Willful default, Suit filed (Willful Default), Written off, Suit filed and written off, Willful default and written off, and Suit filed (willful default) and written off.

How to Fight Credit Card Fraud India ?

Credit Cards are increasingly being accepted as a means of payment as proved by Data from RBI. However, Credit Card frauds occupies the Top Slot in the Number of Banking Frauds Statistics as released by RBI. Now as the pioneer adviser in this sector, I feel it is my responsibility and have been taking several steps in this direction.

I have received several mails where consumers complain about fraudulent transactions on credit cards. I asked the RBI -
As a Credit Card Customer of a Bank regulated by RBI, what are my rights when a fraudulent transaction occurs on my card which is reported to the bank as disputed transaction?
RBI responded as follows,

In terms of para 4 of the Master Circular on Credit Card Operations DBOD.No.FSD.BC.19 / 24.01.011/ 2009-10 dated Jul1, 2009 that The card issuing bank/NBFC should ensure that wrong bills are not raised and issued to customers. In case, a customer protests any bill, the bank/NBFC should provide explanation and, if necessary, documentary evidence to the customer within a maximum period of sixty days with a spirit to amicably redress the grievances.

How to apply the above clause while fighting against the bank ?

• Demand a copy of receipt generated by the Point of Sale system on which you normally sign agreeing to pay the amount mentioned in the bill. Compare the signature and in case of fraud, the signature won't match and hence register a objection with the bank
• Bank is under the obligation to provide complete explanation and documentary evidence
• Kindly correspond in writing only with sufficient evidence of your letter having reached them [Speedpost, Registered Ad, Fax with Acknowledgment, etc]
• During this period, kindly pay off all the amount due on the credit card except the disputed amount
• If the bank doesn't show inclination to resolve your case within 60 days take the matter to the ombudsman of the respective bank and wait for 30 days. If the issue is still unresolved then appeal to the RBI Ombudsman

We strongly advise citizens to stay away from credit cards until RBI regulates this industry to the satisfaction of users and makes this product consumer friendly.

Debit Card - Vs Credit Card Transactions in India

Just for the sake of comparison, I compiled data directly from the RBI to track Debit Card Vs Credit Card spending habit by consumers in India. For the quarter ending DEC-2009, Indians spent Rs 16,423.66 cr on Credit Card and Rs 7,262.95 cr on their debit cards.

The following chart illustrates the comparison between Debit Card Spend Vs Credit Card Spend in India MoM for the Dec-2009 quarter. This was also the Quarter of Festival Season - Shopping Season for consumers :-)

Additional data reveals that - the spend of Rs 16,423.66cr on Credit Card Plastic was done by 6.03 cr transactions thus making every transaction worthy of Rs 2,723.

The spend on Debit Card was Rs 7,262.95 involving 4.34 cr transactions thus the Average ticket size of each Debit Card Transaction being Rs 1,673.

Though the Number of Credit Cards in circulation has gone down, the spending has increased which implies that Banks have been able to retain just the quality customer with long standing banking relationship. Questions and Comments can be posted on the Forum.

Number One Banking Fraud India - Credit Cards

In a report compiled by the FreePress as obtained from RBI on the top 10 categories of Fraud in Indian Banking system, Credit Card Fraud occupies the Numero Uno slot. This is no surprise to us since in over 3 years of existence we have received so many complaints which tell us the true story. Who is at Fault ? The RBI ? The Banks ? Or The consumer ? Well, in our opinion, the major bug lies with the System itself along with the misuse by the consumer who was pampered and spolit by the banks.

The Deficiencies of RBI in Credit Card Regulations:

• Rights of Consumers when a fraudulent transaction occurs the card which is reported to the bank as disputed transaction.
• Should the Customer Pay the disputed amount [if capable of paying] to the bank until the issue is resolved or does the customer has the right to abstain himself from paying the disputed amount until the issue is resolved?
• Does RBI Maintain a Blacklist of Merchants where Fraudulent Credit Card Transactions have occurred Or Does RBI Advise Banks to Maintain a Registry of Merchants who are involved in Fraudulent Transactions? If so, what is the action initiated by RBI on such Merchants?

How the Bank Failed in Credit Card Instruments:

• Issued the Cards without Due Diligence of customers
• Rampant mis-selling by its DSAs[Bundle of Liars]
• Generous Credit Lines and Loans on Cards
  
• Didn't take initiatives to protect the consumer - Photo and Signature were not embossed on the Cards. Honored payments to Merchants where fraudulent transactions occurred, despite the payment being disputed by customer.
• Unsolicited Credit Cards - Though it was very less in 2009

And the Consumer is at Fault Too:

• Lacks knowledge of Credit and Card
• Using Cards at Fake Merchant Terminals to avail CASH which was treated as Purchase by Banks
  

We had sought information from the RBI on the Total Number of Debit Cards and Credit Cards in use in the country, but they said that they don't collect nor have this information.