TIMES OF ASSAM
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Indian Credit Cards issuing policy and the needy to suffer

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Credit Cards
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: Guwahati, March 10, 2011

Crores of money lost due to improper credit risk assessment of customers, lakhs of untraceable credit holders who vanished without paying back money, thousands of theft complaints and hundreds of reported card fraud cases. That’s the inside story of the million dollar business of Credit Cards in India. So much of trouble has been imparted to the banks in India that issue of credit cards to new customers has been put on hold by most banks all across the country. But by suspending issue of credit cards, the banks or the industry in general is not taking into account the inconvenience this has led to thousands of genuine prospective Indian customers who are in actual need of the facility.

The Banks, unashamed to the extent are blaming the customers for it, but are seen hiding their own mismanagement of the entire system earlier. These banks, in earlier times, were found selling and distributing credit cards in dozens, not to forget their agents who lined up in roads, in front of offices, calling in telephones to provide Instant credit cards for free. In most cases, as is evident now, the cards were given away without proper background verification of the customer (address, credit capacity, etc) and the race to win more profits by distributing more cards has turned into only a boomerang for the banks. In fact the recent banks surveys in February 2011 showed that most banks do not follow adequate and mandatory security policies while issuing credit cards. There are also reported instances where the agents and brokers were involved in scams.
However, it’s really strange that all the scams happened inspite of the fact that the Banks in India always gave preference to the customers with sound bank balance. True to its capitalistic nature, Indian Banking system has always favored the riches so as to gain more profit. In Assam, credit cards are now issued as 80% limit against fixed deposits. HSBC provides credit cards if a customer have a minimum balance of 1 Lac rupee for saving account and Rs 7 Lac for business account! So a middle earning person can never avail a accredit card! This is unlike countries like Australia where the first preference to issue a credit card is an unemployed person (ones with good skills and education are chased by banks), so that the needy guy can use the card as a loan, set up some earning mechanism and pay back. This helps in the overall growth of the economy, unlike Indian were India where only the rich are given the chance to get richer. And the poor ones left to get poorer.
The Banks not issuing credit cards has hit the Indian customers a great deal. Genuine and prospective freelancers, outsourcing merchants who require credit cards for online payments are in deep trouble already because of the Banks stand and non cooperation. The Government too has not helped much as usual apart from issuing a recent circular on “Credit Card Operations of Banks” asking banks to set up internal control systems to prevent frauds and the Finance Minister proving assurance of the RBI working on measures to deal with fraud problems.

Case in point, one way of tacking the issue of avoiding fraudulence due to improper verification of customers would be something similar to what was done with Cellular phone customers in Assam few months back. In Assam, the authorities forced millions of mobile phone customers to re-submit all documents to their sim card providers at a short notice, else threatening to cut off services. Although the short notice in Assam was terribly inconvenient for the common people (thousands of people had to stand in long queues leaving jobs and work to get their papers submitted), a similar campaign with adequate timeline to the people can solve the issue of verification of credit customers once and for all, in India. The point is, the needy ones must not suffer due to failure of banking services or due to the action of thugs who are in plenty in this country.

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Indian Credit Cards issuing policy and the needy to suffer

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