First Indian credit card with Internet access

By K.Satyamurty

BANGALORE JULY 13. The ICICI Bank, which has five branches and nine ATMs in Bangalore, is set to expand its operations here and throughout the southern region. Ms Chanda Kochhar, Senior General Manager of the bank told The Hindu that the South Indian operations accounted for the bank's third largest operations in the country after the western and northern regions.

The ICICI credit card launched here on Thursday was the first in India with Internet access. The card was launched in association with VISA International. Credit card holders could now avail several online facilities such as viewing and printing statements, obtaining details about their payments, outstanding amounts and due dates, request for a duplicate PIN, send instructions and apply for new cards or add-on cards.

The ICICI card offered flexibility to customers in India who were scared of falling into a debt trap, using their cards more than they would wish to spend. The customer could specify individual "spend limits" on both the primary and add-on cards, within the available credit limits. This was expected to increase the number of customers using credit cards, Ms Kochhar said.

The ICIC Bank had conducted an extensive survey of the Indian credit card market, revealing interesting information. The market size had grown from a base of five lakh cards in 1993 to around 38 lakh cards now. However, the penetration level of cards across cities and cross-sections was still low. For example, out of the 20 million income tax assesseees in India, only 2.3 million (10.15 per cent) were cardholders.

Credit cards were being increasingly accepted as a safe and convenient payment tool among Indian consumers. This was reflected in the high growth rate of 25 to 30 per cent over the last two to three years in this industry. The consumer had a wide choice with overseas and Indian banks offering several products.

An interesting finding of the survey was that consumers still felt threatened by a credit card, the primary reason being the risk of overspending. It was looked upon more as a status symbol than as a convenient, alternative mode of payment. Among cardonwers, the primary reasons for having a credit card were: high credit limit, convenience, wide acceptance and travel priveleges. The ownership was still limited to CEOs, senior and mid-level executives and businesspersons. There was significant ownership of multiple cards.

The categories that an Indian consumer liked to spend on through credit cards varied from travel and entertainment,

clothing and allied shopping to consumer durables. In 1999, clothing and related shopping topped the list. closely followed by travel and entertainment.

Usage across various age groups seemed to reflect the needs of each group with the younger cardholders using the cards more for entertainment and personal shopping and those in the 31 to 40 age group who used it to purchase household provisions and durables. Low awareness regarding formalities hindered more use of cards.

The credit cards introduced by ICIC Bank included True Blue, Sterling Silver and Solid Gold, with different applications and annual fees. The VISA tie-up ensured the cards would be accepted at one lakh outlets in India. The bank also had a 24-hour call centre for customer assistance and built-in cash advance facilities at all VISA-affiliated ATMs.

Send this article to Friends by E-Mail

Section  : Southern States
Previous : Tourism township planned at Jog Falls
Next     : RSS-BJP men go on the rampage in capital