A

PROJECT REPORT
ON

A STUDY ON CREDIT CARD BUSINESS IN BANKS: OPPORTUNITIES

AND THREATS
SUBMITTED TO THE UNIVERSITY OF RAJASTHAN
FOR THE DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION
2013-2014

SUPERVISED BY-

SUBMITTED BY-

Dr. SIMMI CHOYAL

GARVIT JAIN

ASSISTANT PROFESSOR

BBA IV SEMESTER

MAHAVEER COLLEGE OF COMMERCE

ACKNOWLEDGEMENT
This project has given me immense knowledge about the practical aspect of Credit Card
Business and its working. I got learn a lot about the marketing methods and the way they
are applied to get the customer attracted. This project also helped me to improve my
report making skills and the true meaning of marketing is now clear to me.
Further I express my gratitude to my academic project guide, Dr. Simmi Choyal for her
valuable guidance which helped me throughout the project.

Garvit Jain
Student of BBA IV Semester

DECLARATION
2

This is to certify that all the work contained in this research titled as Credit Card
Business: Opportunities and Threats is genuinely done by me as a part of project
during 2013-14. Wherever some material is taken from website or other published
literature, suitable references are given and sources are acknowledged.

Garvit Jain

Student of BBA IV Semester TABLE OF CONTENTS

S.No.

CHAPTERS

Page no.

Introduction of the topic

Introduction of the organization

Research methodology

31

Data analysis and interpretation

42

Facts and Findings

60

Conclusion and suggestions

61

Bibliography

63

Appendices

64

CHAPTER 1
INTRODUCTION OF THE TOPIC
Introduction
The idea of lending money through a card goes as far back as the 1800s. According to the 2005 FDIC
Banking Review's paper called "Overview of Recent Developments in the Credit Card Industry",
merchants and financial intermediaries provided credit for agricultural and durable goods. The cards
soon began to spread to other industries. Hotels and department stores presented their most valued
customers with paper identification cards. The cards were mostly used at that one location; however,
some local merchants would accept the competitors' card.
Among the payment choices tucked away in a consumer's a wallet is the CREDIT CARD. Its popularity
since its debut in the late 1950s has skyrocketed. Many people enjoy the convenience and protections it
offers, such as the ability to defer payments and keep records of purchases. However, credit cards can
either help to improve your lifestyle by offering convenient payment and helping you build credit, or
they can leave you with a pile a of debt - it all depends on how you use them.
Despite signs of growth, the economy is still emerging from the worst recession in recent memory, a
phenomenon that hit credit card issuers particularly hard. With consumers spending less (whether driven
by austerity or reluctance to take on more debt) and regulatory pressures constraining fees and interest
rates, credit card issuers have experienced a material impact on income. Coupled with increases in
delinquencies and charge-offs, card issuers have had to weather nearly unprecedented turbulence.
It wasn't until the late 1950s that Bank of America introduced the Bank America card, the first general
purpose credit card. The bank created a separate credit card operation entity that in the mid 1970s
became known as VISA. In 1966, competing banks spawned rival cards as a result of Bank of America's
success. This network of bank owners later created an association that came to be known as
MASTERCARD.
Throughout the years, the credit card industry has been the subject of much debate. On the one hand,
many critics have blamed credit card issuers' loose restrictions for high fees and rates, which are often
hidden in complex credit agreements. The deregulation of the industry that occurred in 1970s and 1980s
5

is often blamed for this. However, in 2009, U.S. President Barrack Obama signed a new bill into law to
curb the most controversial credit card practices, including interest rate hikes, penalties and marketing to
college students.
As a result, some card issuers have undertaken aggressive cost reduction programs but while this
approach has allowed most to survive the turmoil, continuing to cut costs alone is not a sustainable longterm strategy. In the face of economic uncertainty, a persistent reliance on cost-cutting could lead an
organization into permanent decline if conditions do not rapidly improve. Institutions that are too
heavily focused on cost-cutting may continue to reduce services, headcount, product functionality and
technical innovation, eroding the tools for recovery and growth when the external environment does
improve.
This leaves organizations with a dilemma: determining when to switch from an intensive focus on
managing costs to investing in the foundations for growth. History shows that the sooner an organization
invests, the quicker and more sustainable its recovery will besuggesting that reacting swiftly to some
of the current positive trends in economic data and investing now may be the most effective strategy.
Furthermore, doing so may provide an issuer with the advantage of being first to market with new
products, particularly as consumer behavior shifts and the collective demands upon card issuers change.
Investing for the future is not only desirable, but will very quickly become essential for the lending
community, as consumers increasingly seek out products and issuers that can meet their emerging
desires for greater control and flexibility. As such, understanding where to invest is critical, and
investigating how the industry and consumer demand may change is integral to ensuring that investment
will ultimately satisfy the objectives of the organization as well as the needs of its customers.
It is with this in mind that we review what is credit card, its types, the growth Credit Card has seen over
the years and important opportunities for innovation and technological advancement in the credit card
space along with what threats credit card users are prone to with its usage.

WHAT ARE CREDIT CARDS?

2

A CREDIT CARD is a card or mechanism which enables to purchase goods, travel and dine in a hotel
without making immediate payments. The holders can use the cards to credit from banks unto 45 days.
The credit card relieves the consumer from carrying heavy amount of cash and ensures safety. It is a
convenience of an extended credit without formality. Thus, credit card is a passport to, SAFETY,
CONVENIENCE, and PRESTIGE AND CREDIT.
Think of credit as borrowed money. This money is made available to you, but it must be repaid within an
agreed amount of time. Credit cards provide a line of revolving credit. This differs from charge cards,
which require that the balance is paid at the end of the month.

Credit cards are obtained based on your ability to repay the borrowed money. The lender is cautious
about giving money to a risky borrower, especially since the money is unsecured. A borrower's spending
habits are used to determine his or her risk; these are assessed based on his or her credit report. The
report is a very important tool that lenders, such as credit card issuers, use to make a decision as to
whether to loan you money. The credit report keeps tabs on your credit history. It aggregates your
financial information, such as your credit accounts, the account limits and balances, and your repayment
history. A numerical rating is applied to your credit history and it is this score that is considered by
lenders.
Credit cards eliminate the need for carrying cash or checks. A typical plastic card includes the customer's
name and a series of numbers that represent the applicable network, bank and account. The numbers in
3

aggregate are referred to as the "account number" or "card number". The front also features the card's
expiration date and the issuer's logo. In some countries, the card might also include a photo of the card
holder for security.
The back of the card has a horizontal magnetic strip and a signature box that must be signed by the card
holder. The account number and a three- to four-digit card identification number or security number are
often listed as well. Credit cards enable you to reserve a hotel room, airline tickets and concert tickets,
replace lost or stolen items in person, over the phone or through email. They offer convenience and
some special perks for using them, such as travel insurance and gift certificates. They can be used almost
everywhere.
Credit card companies like VISA and MasterCard are commonly associated with credit cards, but they
don't issue the cards or loan the money. The two multinational corporations are among the largest retail
payment networks. They facilitate the processing of payments between merchants and banks. They also
set the transaction terms and fees for merchants and card issuers. Discover, a credit card primarily
offered in the U.S., and American Express also participates in processing transactions, but they issue
cards as well.
Credit card issuers are banks, credit unions, savings and loans and other financial institutions. The
issuers arrange the card holder's credit agreements, but they must abide by the association's basic
standards.

WHO CAN BE A CREDIT CARD HOLDER?

The general criterion applied is a person spending capacity and not merely his income and his wealth.
The other criterion is the worthiness of the client and his average monthly balance. Most of the banks
have clear out the norms for giving the credit cards.
A person who earns a salary of Rs. 60,000/- per annum is eligible for a card.
A reference from a banker and the employers of the applicant is insisted upon.
He should have a savings current account in the bank.
His assets and liabilities on a particular date are reported to bank.
A statement of annual or monthly income.

 He is considered credit worthy upon to certain limit depending upon his income, assets and
expenditure. The eligible customer is asked to fill in application form giving the details of
account number , name , address , income , wealth status and a proof of his income/wealth etc.

TOP 10 CREDIT CARD ISSUERS

1. JPM Chase
2. Bank of America
3. Citibank
4. American Express
5. Capital One
6. Discover
7. Wells Fargo
8. HSBC
9. US Bank
10. USAA FSB

BANKING PROCESS FOR SWIPING OF CREDIT CARDS:

The credit card transaction often takes place within a minute, but it's actually a complex process. When
the credit card is swiped through an electronic terminal or sales unit, the credit card account's
information is read. The process of authorization can take place several ways but, generally, once it is
read a request is sent for the authorization of the sale to the acquiring bank. The acquiring bank then
sends the request to the cardholder's issuing bank or card association, such as VISA. The issuing bank
creates an approval or denial code. The code is sent back to acquiring bank and then to the electronic
terminal. The merchant, typically, will pull out an additional receipt from the register when the process
5

is complete. The receipt will either request your signature or deny your purchase based on the code that
was transmitted.

PARTICULARS DISPLAYED ON THE CREDIT CARDS

Every credit card bears the following particulars:
1. NAME OF THE CUSTOMER: Every card displays the name of customer. It should be
spelled correctly. In case, it does not, the customer can contact the customer service cell/helpline
and get the necessary correction done. This facility is provided free of cost by the bank.
2. 16-DIGIT CARD NUMBER: A unique 16 digit numb0er is allotted to every customer/
cardholder.
3. VALIDITY DATE: The card mentions the period through which it is valid. The card is usually
valid from the date it is received by the customer unto and including the last day of the month
indicated on the card.
4. THE VISA HOLOGRAM AND THE VISA LOGO: The hologram and the logo ensure that
all the establishments throughout the world displaying the visa logo will accept the card.
5. NAME OF THE ISSUING BANK: The card indicates on the top the name of the issuing
bank.

6. SIGNATURE PANEL: The back of the card contains the signature panel. The customer must
put his signature on the signature panel to prevent misuse by any other person. This identifies
the card holder. Signature on the panel would imply that card holder has given his consent to
abide by the terms and conditions governing the use of the credit card. The card is valid is only
if signed.

7. MAGNETIC STRIP: The black magnetic strip contains important information in encoded
from and needs special handling. The card should not be kept in an area where there is a
continuous magnetic field. It should not be left on the top the television. Set or near any
electronic appliance. The card should be kept away from heat and direct sun light.
8. PIN (PERSONAL IDENTIFICATION NUMBER): Each card holder is issued a password or
pin to enable use of the card for accessing his/her card account on the ATM and internet and
also for availing any privilege, benefit or service that may be offered by bank on the card. The
pin is communicated to the cardholder entirely at his/her risk who shall not disclose the pin to
6

any person and shall take all possible care to avoid its discovery by any person. The card holder
shall be liable for all transactions made with the use of the pin whether with or without the
knowledge of the cardholder.
9. TEASER RATE - Often called the introductory rate, it is the below-market interest rate offered
to entice customers to switch credit cards.
10. JOINT CREDIT - Issued to a couple based on both of their assets, incomes and credit reports.
It generally results in a higher credit limit, but makes both parties responsible for repaying the
debt.

EVOLUTION OF CREDIT CARDS

Earlier the sources to lend money were less, and more over not regulated. Earlier people used to borrow
from a money lender, then came banks and now a person gets credit limit on his credit card which helps
him to spend money and pay back at a later date. These days people prefer to use Plastic Currency
over physical currency as it proves to be safe and hassle free. Here plastic currency can be both debit
card and credit card.
To apply for a credit card one needs to fulfill certain criterias like minimum income, fixed source of
income, credit history, etc. In India most of the banks offer credit cards, one can choose from the wide
range of cards which are best suited for them. There are two kinds of cost associated with namely annual
charges and interest repayments.

INTERNATIONAL DEVELOPMENT
POS Banks Multitude Card
Singapores POS Bank recently launched the Multitude Card, a multifunction card targeted to the youth
segment. While PIN transaction s is automatically allocated to debit, contactless transactions and those
authorized by signature can be assigned to rather the cardholders checking account or a line of credit. In
order to qualify for a Multitude Card, customers must be over 21and already have, or apply for, a POS
Bank DDA account. POS (POINT OF SALES).
The challenge of trying to alter consumer behavior is a significant barrier to introducing a successful
multi-function cardso by focusing on the youth market, the Multitude Card must overcome customer

habits that are comparatively less entrenched, and as a result, it could be a better indicator of how the
technology can thrive over the long term.
The development of plastic money is one of the recent Phenomenon's in the banking sector. Plastic
money is a charge card. It is a direct charge against the limit sectioned. It is a debt instrument issued by
some specialized companies. It is one step forward towards cashless and cheque less society. The
operation is through electronic funds transfer {EFT} installations and inter-bank network. Credit cards
are key to the opening of bank accounts for daily payments by the card holders. Credit card has been
rightly called "PLASTIC MONEY". The objective is to provide convenience and security. It eliminates
cash transactions, and protects from the danger of pick pocketing a lot of cash. There is usually interest
free credit for 30 to 45 days.
These plastic cards have the photo identity and holders signature embossed on the card. It also has the
issuing banks name and validity period of the card. The bank issuing the credit card knows well the
customer and his creditworthiness. Basically, the use of credit cards helps the holder to take the
advantage of the two essential aspects of the financial services functions:

Transmission of payments

The granting of credit.

CHAPTER 2
8

INTRODUCTION OF THE ORGANIZATIONS

ICICI BANK AND AXIS BANK
ICICI BANK:
In the 1990s, 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,
both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI
become the first Indian company and the first bank or financial institution from non-Japan Asia to be
listed on the NYSE.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was
its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public
offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE. In
fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal
2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002.
ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development financial
institution for providing medium-term and long-term project financing to Indian businesses.
After consideration of various corporate structuring alternatives in the context of the emerging
competitive scenario in the Indian banking industry, and the move towards universal banking, 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 would create the optimal legal structure
for the ICICI group's universal banking strategy. The merger would enhance value for ICICI
shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning
fee-based income and the ability to participate in the payments system and provide transaction-banking
services. The merger would enhance value for ICICI Bank shareholders through a large capital base and
scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades,
entry into new business segments, higher market share in various business segments, particularly feebased services, and access to the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and
two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and
ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI
and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the
High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the
merger, the ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity.
SALIENT FEATURES
Annual Fee:
All credit card issuers charge an annual fee which is payable at the start of the year. The start of the year,
of course, is your membership year, and not the calendar year. So, if you got yourself a card in March,
you can expect to be billed the annual fee every March until you cancel your card. As a privilege, this
fee is sometimes waived the first time. When the time comes for renewal of your card, you can even use
the reward points you have accumulated from using the credit card over the year to settle your annual
fee.
Forwarding Balance (or Revolving):
The most attractive feature of a credit card is that you need not pay off your dues in whole. You can opt
to pay 5% of the total amount on or before the due date, every month, the rest is carried forward. But
there's a price to pay for this extended credit - interest! Normally, interest varies between 2.5% and 3%
per month.
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 cardholder on the amounts carried forward beyond the
due date for the payment of balances. Most card issuers will tell you their monthly rate of interest. It
might sound low at 3%, but when you look at the interest rate over the year, it turns out to be as high as
43%.

Cash Advance:
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An important feature - lets you withdraw cash from designated ATMs using your credit card. Use
discretion when withdrawing cash on your credit card because the charges for this facility are high,
around 2.5% to 3% per transaction!

BENEFITS:
Credit:
When you use a Credit card to pay for anything, you get an interest-free period of 45 days. Billing
cycles are structured in such a way that you definitely get at least 30 days out of these as clean credit
time, which is especially beneficial to salaried people. Better still, you can opt to pay your bill in full
when you receive it or you can carry forward your payments by paying as little as 5% of the total
amount on or before the due date, every month. You can spend now, pay later.

Convenience:
With a credit card on you, you don't need to run the risk of carrying a lot of cash.

Cash Advance:
Another advantage of a Credit card is that you can use it as an ATM card too! But remember, there's a
fee to it. It typically starts with a flat fee going up to a percentage-based fee on the amount of the
withdrawal.

DECIDING FACTORS FOR CHOOSING THE RIGHT CREDIT CARD

Joining fee and Annual fee
Generally, a card with a higher annual fee enjoys more benefits like higher credit limit, higher accident
insurance cover, accessibility to airport lounges, travel discounts etc. OF at least the used to be the case.
With cutthroat competition between the card issuing banks, players are ready to waive joining fees and
also one-year membership fees for anyone. Grab these offers, or negotiate this for yourself.

Add-on card fee

If you are interested in buying add-on cards for your children, spouse or friend, ask for the add-on card
fee. Remember that you will be settling the bills on the add-on card that you so touchingly gift to
someone dear to you - the statement will come to you, and the responsibility for payment is yours (as far
as the credit card company is concerned).
11

Interest Rate
This is actually a question that you should be asking fairly soon in the discussion. Remember, while the
upfront one off fees are bread and butter for the credit card Company, this is the jam! If you are the sort
who forgets to pay on time, or likes to live it up and live off credit, the interest rate would be of
paramount importance. Most credit card companies charge between 2% to 3 % per month. (Read a
whopping 35% to 43% per year). That's where they make their gravy, and that's where you pay! It is
always advisable to pay off the entire amount on due date, or, if you have a large bank balance, look for
card companies that provide the transfer balance facility. The balance transfer rate is lower for a certain
period (say six months) and then the normal rates apply. But again this is a temporary solution to a
chronic problem.

Reach
Not an important question - most outlets in India accept both the Master card and the Visa card, and
most credit card companies provide Visa or Master cards. So its fairly simple, and doesnt need much
head scratching - they're all more or less the same. One thing you could do is to check out for the
Automated Teller Machines nearest to your house or work place (ATMs - almost all credit card
companies now provide you the facility of withdrawing cash from machines - I guess for things that
cards just cant buy. These machines are called ATMs, and are helpfully scattered all over the
city/country/world). Having more ATM outlets in Thailand wouldnt be of any relevance to a person
who rarely travels abroad, though it may certainly be a goal to work towards after buying the card.
Please also remember that Amex credit cards are not part of the Visa/ Master Chain, and have a separate
chain of outlets where its accepted.

Global Card
Now this could be useful to you if you are an overseas traveler. A Global card can be used for paying
expenses in foreign currency just like you use a credit card to pay in rupees. Nowadays, a Global card is
being issued at the same cost as for a similar domestic one. It is better to have a global card, especially if
there is no premium attached.

Use of branded or affinity cards

A partnership between a card issuer and the non-profit, social or lifestyle association is what results in an
affinity card. This is for providing financial rewards to the group or association. e.g. Citibank Womens
12

card, Citibank WWF cards. Citibank WWF Visa card donates a percentage of the transaction value
made through the card to the WWF fund for its environmental conservation activities. A subscription to
such cards helps ease the conscience though it provides no monetary value.
A partnership between a bank card issuer and a commercial partner result in a co-branded card. This
entitles the cardholder to lots of freebies, prizes, discounts on co-branded products. Logic: If a customer
is loyal to one brand, he will want to purchase the other. So if you were loyal to a particular brand, it
would make sense going for those co-branded cards. E.g. Citibank and IOC, Bank of India and Taj group
of hotels etc.

Lost card liability

Most Card issuers mention in the brochures that lost card liability is Rs 1000. Be careful, that is actually
after it is reported to the Bank. The liability is actually unlimited before reporting (in cases like this, you
would actually thank the credit limit because though the liability is unlimited, the ceiling should
logically be your credit limit, and the outlets accepting your stolen card should actually check that you
(or the person who stole your card) havent exceeded your credit limit). Avoid banks that make you
liable for card misuse for a single minute after reporting it.

Freebies
Citibank gives a Ponds gift hamper free on subscription to its Citibank Women card. Personal accident
insurance for Air, Road or Otherwise is packaged along with the subscription. Also Baggage cover,
Purchase Protection cover and credit shield is bundled free of cost along with the card. If you feel one
these parameters are important, and then settle for the one that gives a higher cover.

Immediate cash withdrawal

Check out if the Bank has any ATMs near your house or workplace. This surely helps in times of
emergency. The cost component for a cash withdrawal could be classified as follows: Service fee
(transaction fee) each time you pull out money, and Interest rate for the period for which you have used
the money - until settlement date. If you are going to withdraw cash frequently, better watch out for this
cost.

Free credit period

The days of credit one gets depends on the statement date and the date of transaction. On an average,
you could assume you'd get around 20 days of free credit. However, if you buy just after the statement
13

date, you could end up getting unto 50 days of credit. Look for cards that give you the highest free credit
period.

Helpline
A 24-hour Helpline service from the Card Company helps the cardholders during the non-banking hours.
Reporting of theft, checking of available credit limit and other enquiries can be made by the cardholder
round-the-clock. In the end, like everything else in life, the card you want is really up to you what
matters the most to you - credit, reach, the freebees, international reach or a combination of parameters.
Use our card category on the left bar to simply list out the names of the cards, or choose by bank name
and see the cards they offer. Or look for cards offering the lowest interest rate. Of the lowest charges on
cash withdrawal (believe me, it gets to be a serious consideration as one goes along). Go to our shortlist
card section, and search for cards based on any criteria that you want. Happy hunting and stay careful you may like to use our section on how to use the card carefully to minimize the chance of its misuse by
someone else.

Comparison between the services of ICICI and AXIS Bank:

S.NO.

ICICI BANK

AXIS BANK

1.

Petrol Surcharge Refund

Petrol Surcharge Refund

2.

PAYBAK rewards program

Edge Loyalty rewards program

3.

Comprehensive Insurance Cover

e Shop Card

4.

Mobile Alerts

Comprehensive Insurance Cover

5.

Global Acceptance

Mobile Alerts

6.

Global Emergency Assistance

Global Acceptance

7.

Interest Free period*

Global Emergency Assistance

8.

Revolve Facility

Interest Free period

9.

Balance Transfer

Revolve Facility

10.

Cash Advance Facility

Balance Transfer

11.

Auto Debit Facility

Cash Advance Facility

12.

EMI Facility

Auto Debit Facility

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13.

Joining & Annual Fee

EMI Facility

14.

E-statements

Joining & Annual Fee

15.

Limit Enhancement

E-statements

16.

Cash Withdrawal

Limit Enhancement

17.

Balance transfer

Cash Withdrawal
Balance transfer

18.

SECURITY MEASURES
A. AXIS BANK and ICICI BANK:
HIGHEST LEVEL OF SECURITY: EMV certified Chip embedded Card, which gives you the
highest levels of security.
COMPREHENSIVE INSURANCE COVER: Comprehensive insurance cover including Air
Accident Cover, Travel related covers, Credit Shield and Lost Card Liability to put mind at ease.

IMPORTANT INFORMATION FOR THE CREDIT CARD USERS

DO'S & DONTS
Do not leave your Credit Card lying around the house or on your desk at work.
If your card is lost or stolen, or you suspect it is being used fraudulently, report it immediately to
your bank.
Hold on to receipts from your transactions. In fact, keep your receipts filed or in one place you'll find them easily, should the need arise. And when you want to throw them away, don't just
thrash into the bin, shred or tear them before you do.

15

 Never give your Credit Card number over the phone, unless you've made the call, and it is to
your bank or someone you trust, and you really, really need to!

The cards offered by the banks can be broadly classified into the following
categories:
1. MasterCard MasterCard is a product of MasterCard International and along with VISA are
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. 23,000
financial institutions in 220 countries and territories issue its products. In 1998, it had almost 700
million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.
2. VISA Card VISA cards are financial institutions around the world distribute a product of VISA
USA and along with MasterCard. 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. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations
accept VISA cards.
3. Affinity Cards - A card offered by two organizations, one a lending institution, the other a nonfinancial 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.
4. Standard Card It is the most basic card (sans all frills) offered by issuers.
5. Classic Card Brand name for the standard card issued by VISA.
6. Gold Card/Executive Card A credit card that offers a higher line of credit than a standard card.
Income eligibility is also higher. In addition, issuers provide extra perks or incentives to cardholders.
7. Platinum Card A credit card with a higher limit and additional perks than a gold card.
8. Titanium Card A card with an even higher limit than a platinum card.

9. Premium cards: As the name suggest these cards offer better services to the card holder and also
a higher limit. There are also many rewards associated with these cards. The target audiences for
these credit cards are HNIs and top management in corporate.

16

10. Cash Back Credit Cards: These kinds of cards provide rebate to the customer. This is possible
because when you shop, your merchant has to pay a small sum to the credit card provider. Quite a
few credit card issuers share the commission with the cardholders by giving them rebate cash back
and even discounts. Generally this amount ranges between 0.25% to 1.5%. The target audiences for
these kinds of cards are working people.

11. Secured Credit Cards: Its a type of card which is secured by savings bank account of the
cardholder for which the card holder must deposit 100% to 200% of the total amount of the desired
credit. In case the credit card holder defaults the credit card issuers can recover the amount from
deposit amount. The target audiences for these kinds of cards are students and people with poor
credit history.

12. Business Credit Cards: These cards are available for business owners and executives. They are
more or less similar to the premium cards. This enables business owners to keep separate
transactions for personal and business purposes.

13. Prepaid Credit Cards: These are like prepaid cards, somewhat similar to debit cards. They work on
the theme of pay now and use at your convenience, very similar to prepaid mobile phone cards.
Cardholder needs to load the desired amount which she/he wishes to use. There are no interest
charges but a purchasing fee plus monthly fees is levied. Target group for these cards are students,
working people.
14. Standard Credit Cards: These credit cards are the most common and are readily available from
most banks and financial groups. They are unsecured, which means you do not have to put down a
security deposit to prove the money can be repaid. The way the annual percentage rate is offered or
calculated for these cards can vary. Here are two examples:

Balance transfer credit cards

Balance transfer credit cards allow consumers to transfer a high interest credit card balance
on to a credit card with a low interest rate. Typical in the market today are balance transfer
credit cards with an introductory Annual Percentage Rate (APR) of 0 percent, with
introductory or teaser rate lasting several months up to a year. The terms of balance
transfer credit cards varies between offers, so be sure to thoroughly read the terms and
conditions for each card.
17

Low interest credit cards

Low interest credit cards offer either a low introductory APR that jumps to a higher rate after
a certain period, or a single low fixed-rate APR. Low interest cards can be very useful when
consumers need make a large purchase because it allows several months to a year to pay it
off with very low or no interest. Before using a low interest card, read all the terms and
conditions of the introductory rate so you will not be surprised by fees or accumulated
interest.
15. General reward points credit cards: Rewards credit cards are similar to cash back cards in that
cardholders can accumulate points towards a reward structure, which is based on how much the card
is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift
cards, electronics, hotel tickets, jewelry, pet supplies and more. Reward programs and promotional
offers often change; thoroughly review a cards terms and conditions before applying.
16. Hotel or travel points credit cards: This is a genre of credit cards specific to hotels and travel.
Some cards are co-branded with hotels. These credit cards allow you to earn points for all purchases,
in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem
your points for free nights and upgrades at the hotel chain your card is co-branded with.
Then there are broader hotel and travel cards with which points can be redeemed for travel, theme
park admission, stays at major hotel chains and more. Because these reward programs can be costly
for credit card companies, many of these cards come with an annual fee. If you are not a frequent
traveler, the annual fee may negate the benefit of the rewards earned.
17. Retail rewards credit cards: These credit cards are co-branded with a major retailer, such as
Disney or Amazon.com. Points are accumulated by making everyday purchases, though cardholders
are awarded with double or triple points for making purchases from the co-branded retailer. Reward
points must be redeemed for products or services from that specific retailer. Try not to carry a
balance with retail cards; their interest rates tend to be higher.
18. Gas cards with points or rebates: Gas cards come in two species: general and brand-specific.
General cards treat all gas companies equally, while brand-specific cards favor one gas company. A
general gas rebate card, for example, may give you 1 percent cash back for general purchases but
rewards you with 5 percent back for buying gas or having auto maintenance done at any company. A
18

gas- company has their specific card, in contrast, will give you a 1 or 2 percent rebate for regular
purchases, but you will earn 5 percent rebate only when buying gas at that companys gas stations.
If you tend to be loyal to a certain gas company, a brand- specific card may benefit you, but if you
tend to just stop at whichever station is closest, you may be best with a general gas rebate card.
Additionally, its important to remember that a gas company may be very popular in one state, but
uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long
road trip.
19. Airline mile/frequent flier credit cards: While certain general reward credit cards allow points to
be redeemed for plane tickets among other things, there is a subset of reward cards especially for air
travel. This type of card allows consumers to earn airline mile credits whenever they make
purchases. Some cards are co-branded with a specific airline, while some are genetic and can be
redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like
frequent flier miles.

Airline specific credit cards

These cards are associated with one airline. Typically, the cardholder accumulates points from
both making purchases with the card and by flying on the specified airline. These cards come
with other perks for example, some allow you to earn double points when you use the card to
purchase plane tickets with that airline, get priority boarding and avoid baggage fees.

Generic airline miles cards

These credit cards allow you to redeem your reward points for air travel through any airline,
travel agent or online travel site. This is a great option for people who arent involved in a
frequent flier program and arent loyal to any particular airline. It allows you the flexibility of
redeeming your miles for whichever airline best suits the needs of your trip. With a generic
airline card, you gain points for every dollar spent on the card, but because it is not associated
with a particular airline, you cant gain additional points by flying.
Each airline credit card is a bit different, so be sure to read the cards terms and conditions to find
out how many miles you gain for every dollar spent. Other things to look for are how many miles
you need before you qualify for a free plane ticket, if there is a cap on points that can be earned
annually and whether or not unused airline miles expire. Some expire in five years while others
19

do not expire at all. Airline mile reward programs can be costly for credit card companies, so
many of these cards come with an annual fee. This type of reward program is beneficial for
frequent travelers or those who want to use their card to plan vacations, but the associated fee
might make them impractical for other cardholders.

DIFFERENT TYPES OF CREDIT CARDS OF ICICI AND AXIS BANK:

ICICI BANK
ICICI bank Diamante Credit Card:

ICICI bank Sapphire Credit Card

ICICI bank Ruby Credit Card

ICICI bank Coral Credit Card

20

Jet Airways ICICI bank Sapphire Credit Card

Jet Airways ICICI bank Ruby Credit Card

Jet Airways ICICI bank Coral Credit Card

ICICI bank British Airways Premium Credit Card

21

ICICI bank HPCL Platinum credit Card

ICICI bank Instant Platinum credit Card

ICICI bank Visa Signature Credit Card

ICICI bank Platinum Identity Credit Card

ICICI bank Ascent American Express Credit Card

22

ICICI bank British Airways

Classic Credit Card

ICICI bank Platinum Credit Card

ICICI bank Titanium Credit Card

ICICI bank Instant Titanium Credit Card

23

ICICI bank Instant Gold

Credit Card

ICICI bank Future Gold Credit Card

ICICI bank HPCL Gold Credit Card

ICICI bank Preferred Credit Card

ICICI bank Classic Credit Card

ICICI bank Affinity Credit Card

24

ICICI bank EMI Credit Card

ICICI bank Value for money Credit Card

AXIS BANK
Infinite Credit Card

Signature Wealth Credit Card

25

MY Wings Credit card

MY Choice Credit Card

MY Zone Credit Card

26

MY Business Credit Card

Corporate Credit Card

Titanium Smart Traveler Credit Card

Platinum Credit Card

27

SWOT ANALYSIS
(A)

STRENGHTS
Online services.
Advanced infrastructure.

Professional and friendly staff.

12 hrs. Banking services.

ATM Services.

Associated with social causes.

(B) WEAKNESSES

Overuse revolving credit makes it easy to spend beyond your means.

Paperwork need to save your receipts and check them against your statement
each month. This is a good way to ensure that you haven't been overcharged.

High-cost fees will become much more expensive if you carry a balance or miss
a payment.

Unexpected fees typically, you'll pay between 2 and 4 percent just to get the
cash advance; also cash advances usually carry high interest rates.

(C) OPPORTUNITIES
28

Profit margins will be good.

Could extend to overseas broadly.
New specialist applications.
Could seek better customer deals.
Fast-track career development opportunities on an industry-wide basis.

An applied research centre to create opportunities for developing techniques to provide added-value
services.

(D) THREATS

Fraud possibility.

Financial problems.

Unscrupulous collection practices.

Endangering health.
CURRENT SCENARIO:
Financial performance:
ICICI Bank is Indias second largest bank with total assets of Rs. 3634.00 billion (US$ 81 BILLION) at
March 31, 2010 and profit after tax Rs. 40.25 billion (US $ 896 million) for the year ended March 31,
2010. The bank has a network of 2,016 branches and about 5,219 ATMs in India and presence in 18
countries. 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 specialized subsidiaries in the
areas of investment banking, life and non life insurance, venture capital and assets management. The
Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and
representative offices United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Banks equity
shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India limited
and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
29

Branches and ATMs

ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420 branches
and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has made its presence felt in 18
countries United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa, and
Bangladesh, Thailand, Malaysia, and Indonesia. The Bank proudly holds its subsidiaries in the United
Kingdom, Russia and Canada out of which, the UK subsidiary has established branches in Belgium and
Germany.

AXIS BANK
Axis Bank Limited (formerly UTI Bank) is the third largest private sector bank in India. It offers
financial services to customer segments covering Large and Mid-Corporate, MSME, Agriculture and
Retail Businesses. Axis Bank has its headquarters in Mumbai, Maharashtra.
Axis Bank began its operations in 1994, after the Government of India allowed new private banks to be
established. The Bank was promoted in 1993 jointly by the Administrator of the Unit Trust of
India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National
Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation
and United India Insurance Company. The Unit Trust of India holds a special position in the Indian
capital markets and has promoted many leading financial institutions in the country
Axis Bank (erstwhile UTI Bank) opened its registered office in Ahmadabad and corporate office in
Mumbai in December 1993. The first branch was inaugurated on 02nd April 1994 in Ahmadabad by
Dr. Manmohan Singh, the then Finance Minister of India.

SERVICES:
Axis Bank operates in four segments: Treasury operations, Retail banking, Corporate/Wholesale
banking and other banking business.

30

Treasury operations: The Banks treasury operation services include investments in sovereign and
corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange
operations on the account, and for customers and central funding.
Retail banking: In the retail banking category, the bank offers services such as lending to
individuals/small businesses subject to the orientation, product and granularity criterion, along with
liability products, card services, Internet banking, automated teller machines(ATM) services,
depository, financial advisory services, and Non-resident Indian (NRI) services.
Corporate/wholesale banking: The Bank offers to corporate and other organizations services
including corporate relationship not included under retail banking, corporate advisory services,
placements and syndication, management of public issues, project appraisals, capital market related
services and cash management services.

OTHERS:

NRI services: Products and services for NRIs that facilitate investments in India.

Business banking: The Bank accepts income and other direct taxes through its 214 authorised
branches at 137 locations and central excise and service taxes (including e-Payments) through 56
authorised branches at 14 locations.

Investment banking: Banks Investment Banking business comprises activities related to Equity
Capital Markets, Mergers and Acquisitions and Private Equity Advisory. The bank is a SEBIregistered Category I Merchant Banker and has been active in advising Indian companies in
raising equity through IPOs, QIPs, and Rights issues etc. During the financial year ended 31
March 2012, Axis Bank undertook 9 transactions including 5 IPOs and 2 Open Offers.

Lending to small and medium enterprises: Axis Bank SME business is segmented in three
groups: Small Enterprises, Medium Enterprises and Supply Chain Finance. Under the Small

31

Business Group a subgroup for financing micro enterprises is also set up. Axis bank is the first
Indian Bank having TCDC cards in 11 currencies.

Agriculture banking: 759 branches of the Bank provide banking services, including agricultural
loans, to farmers. As on 31 March 2013, the Banks outstanding loans in the agricultural sector
was INR 148 billion, constituting 7.5% of its total advances.

OPERATIONS:

Indian Business: As on 30-Sep-2013, the Bank had a network of 2225 branches and extension
counters and 11796 ATMs. Axis Bank has the largest ATM network among private banks in India and it
operates an ATM at one of the worlds highest sites at Thegu, Sikkim at a height of 4,023 meters
(13,200 ft) above sea level.

International Business: The Bank has seven international offices with branches at Singapore, Hong
Kong, Dubai (at the DIFC) and Colombo and representative offices at Shanghai, Dubai and Abu Dhabi,
which focus on corporate lending, trade finance, syndication, investment banking and liability
businesses. In addition to the above, the Bank has a presence in UK with its wholly owned subsidiary
Axis Bank UK Limited.

INITIATIVES:

The Business Gaurav SME Awards: In 201112, Axis Bank set up 6 SME centres and SME cells
each across the country, taking the total number to 32 SME Centres. The Bank also organized the
'Business Gaurav SME Awards' in association with Dun & Bradstreet to recognize and award
achievements in the SME space.

Financial inclusion: Till March 2012, the Bank had opened over 4.4 million No Frills accounts in
over 7607 villages through a network of 15 Business Correspondents and nearly 6000 customer
service points. Axis Bank has a strong presence in Electronic Benefit Transfer (EBT) and has
covered 6800 villages across 19 districts and 9 states till date with over 3.7 million beneficiaries.

Industry First Initiatives:

32

Axis Bank launched Mobile Banking App 2.0 for its retail resident Indian customers the first of
its kind in India, which offers a high level of personalization. The App has been launched in
partnership with Tagit, a leading Singapore mobile solutions company. The new application uses
Tagit's mobility solution platform that enables Banking on-the-go.

'Axis Bank - ISIC Forex Card' for students, is the first photo Travel Currency Card available in
USD, Euro, GBP and AUD currencies. It can be used across 34 million merchant locations and
at over 2 million MasterCard ATMs globally.

Axis Bank has partnered with Visa to launch 'e-KYC' (electronic Know your customer) facility,
first organization in India to introduce Biometrics based KYC, offering convenience, speed and
ease to Aadhaar-registered individuals to open bank accounts.

CHAPTER 3
RESEARCH METHODOLOGY
Research comprise defining problems, formulating hypothesis or suggested solutions; collecting,
organizing and evaluating data; making deduction and reaching conclusions; and at last carefully testing
the conclusions to determine whether they fit the formulating hypothesis. In short, the search for
knowledge through Objective & Systematic method of finding solutions to a problem is Research.
Research is the investigation of a particular topic using a variety of reliable, scholarly resources. The
three major goals of research are establishing facts, analyzing information, and reaching new
conclusions. The three main acts of doing research are searching for, reviewing, and evaluating
information. Learning what research is not may help you fully grasp the concept. Randomly selecting
33

books from the library is not research, nor is surfing the Internet. On the contrary, research requires
organization, resourcefulness, reflection, synthesis, and above all, time.
The research process is the methodical approach to finding and examining a variety of reliable, scholarly
resources on a particular topic. The research process has a beginning and an end, with many stages or
steps in between. Each one of these steps is built upon the foundation of information. Brainstorming
ideas, searching for resources, and analyzing ideas are all information-based activities. Just like DNA is
the building blocks of life, information is the building blocks of the research process. That is why
learning how to find, evaluate, and use information is essential to successfully engaging in and
completing the research process.

Title of the Study

A study on Credit Card Business in Banks: Opportunities and Threats

OBJECTIVES OF THE STUDY

Objective is one of the important parts of any study. Following are the objectives of the study: To view the salient features of the credit cards.
To analysis the benefits of credit cards.
To analyze the drawbacks of credit card.
To view various security measures adopted by Axis Bank and ICICI Bank.

Type of Research
Broadly Speaking Research Design can be of three types
1) Exploratory Research Design.
2) Descriptive Research Design.
3) Casual Research Design.

An Exploratory Research Focuses on the discovery of ideas

34

 A Descriptive Research Focuses on a detailed description of certain phenomena

A Casual Research is undertaken when the research wants to know the cause and effect relationship
between two or more variables.
The study was essentially an exploratory one. We call it exploratory research design because here we are
studying The Emerging Trends of Information Technology Sector. And thus evaluating them that how
proximate they are or how applicable they are in our real life.
A Descriptive study is rigid and formal. It requires clear specifications of who, why, what, when and
where aspects of research. It requires formulations of more specific hypotheses and testing these through
statistical inference technique. Despite its merits, the important fundamental weakness is descriptive
research doesnt find the cause and relationship among variables.

Sample Design:
The population considered for the purpose of the survey was people residing in Jaipur.

Sampling Techniques
In the survey conducted, the sample was random in nature comprising of people from different age
groups and income status. Since the information required was not of a very technical nature and also
looking at the scope of the project and the extent of the target segment, the sampling technique
employed was Convenience Sampling. I administered the questionnaires.

Sample Size:
The sample size is of 100 respondents. This was done keeping in mind the time constraints and the fact
that I felt that this number would be enough to serve the information needs required to show the trends.

Data Collection
This is a study of the banking Industry, I have used both the primary and secondary sources for data
collection.

Primary Data
35

The data analysis of the study has been done using an exploratory research process and a structured
questionnaire was developed for this purpose. Questionnaire, schedules and interview were the various
methods for primary data collection. The reason to use these methods was the need for the free influx of
information about the products. Also this method allowed the use of skills gained in class.

Secondary Data
Secondary data is data collected by someone other than the user. Sources of secondary data included
censuses, organisational records and data collected through qualitative methodologies or qualitative
research. Primary data, by contrast, are collected by the investigator conducting the research.
Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the
case of quantitative data, provides larger and higher-quality databases that would be unfeasible for any
individual researcher to collect on their own. In addition, analysts of social and economic change
consider secondary data essential, since it is impossible to conduct a new survey that can adequately
capture past change and/or developments. This secondary information has been sourced from the
internet and from business related magazines and newspapers.

Limitations of Survey
Response Errors
These may arise when the respondents give inaccurate or incomplete answers. For e.g. in our survey a
respondent may not mention that he had test driven a car before purchasing it A major problem faced in
the survey involved the comparative ratings of various attributes for all the brands of cars. Many of the
respondents were not very willing to rank so many factors as they perceived it to be time consuming.

Open Ended Questions

Some of the questions in the questionnaire were open-ended to avoid any kind of bias from the
respondents end. But a drawback of this approach is that there was an incomplete capture of his
responses, as the respondent could not always come out with the purchase steps and the time taken in
them. The reasons for such inaccuracy could be because of unfamiliarity, fatigue, boredom, faulty recall
and the Question format.
36

Random Sampling Errors

This can occur, as the particular sample selected is an imperfect representation of the population of
interest. The area covered in the survey was Jaipur region and the customer preferences and tastes in
different Regions could not be covered.

INTEREST AND CHARGES ON ABOVE MENTIONED CARDS:

ICICI Bank:
ICICI Bank Card Variant

Joining Fee
(1st year)

Annual Fee
(1st year)

Annual Fee
(2nd year
onwards)

Supplementary
Card Fee
(Annually)

ICICI Bank Sapphiro Credit Card

25,000

Nil

3,500*

Nil

ICICI Bank Signature Credit Card

25,000

Nil

2,000

Nil

ICICI Bank Singapore Airlines VISA Platinum

Credit Card

Nil

6,000

6,000

Nil

ICICI Bank British Airways Premium Credit

Card Account

Nil

7,000

7,000

Nil

ICICI Bank British Airways Classic Credit Card

Account

Nil

3,500

3,500

Nil

ICICI Bank Rubyx Credit Card

5,000

Nil

2,000**

Nil

Jet Airways ICICI Bank

Sapphiro American Express Credit Card

5,000

Nil

5,000

250

Jet Airways ICICI Bank

Sapphiro Visa Credit Card

5,000

Nil

5,000

250

Jet Airways ICICI Bank

Rubyx American Express
Credit Card

2,500

Nil

2,500

250

Jet Airways ICICI Bank

Rubyx Visa Credit Card

2,500

Nil

2,500

250

Jet Airways ICICI Bank Coral American Express

Credit BCard

1,250

Nil

1,250

250

Jet Airways ICICI Bank Coral Visa Credit Card

1,250

Nil

1,250

250

ICICI Bank Ascent American Express (R) Credit

Card

4,000

Nil

1,000

Nil

ICICI Bank Kingfisher

Airlines MasterCard World
Credit Card

Nil

5,000

2,500

Nil

ICICI Bank Kingfisher Airlines MasterCard

Platinum Credit
Card

Nil

2,000

1,000

Nil

ICICI Bank Kingfisher Airlines MasterCard

Titanium Credit

Nil

500

500

Nil

37

Card
ICICI Bank Platinum Identity Credit Card

2,000

Nil

750

Nil

ICICI Bank Coral Credit Card

1,000

Nil

500***

Nil

ICICI Bank HPCL Platinum

Credit Card / ICICI Bank
HPCL Titanium Credit Card

Nil

500

500****

Nil

ICICI Bank Platinum Chip

Credit Card

Nil

199

99****

Nil

AXIS BANK:
Charges

Privee Infinite
Credit Card

Wealth Signature Credit

Card

Signature Credit Card

Standard Joining Fee

Nil

Nil

Nil

Standard Annual Fee

Nil

Nil

Nil

Standard Add-on Card

Joining Fee

Nil

Nil

Nil

Standard Add-on Card

Annual Fee

Nil

Nil

Nil

Finance Charges (Retail

Purchases & Cash)

2.95% per month

(41.75% per
annum)

2.95% per month (41.75%

per annum)

2.95% per month

(41.75% per annum)

2.5% (Min. Rs 250)

2.5% (Min. Rs 250) of the
of the Cash
Cash Amount
Amount

Cash Withdrawal Fees

2.5% (Min. Rs 250) of

the Cash Amount

Fee for Cash Payment

Rs. 50/-

Rs. 50/-

Rs. 50/-

Card Replacement (lost or

stolen or re-issue)

Waived

Waived

Waived

Emergency Card
Replacement Fee when
overseas (through VISA)

As per VISA
Global Customer
Assistance Services
(GCAS).

As per VISA Global

Customer Assistance
Services (GCAS).

As per VISA Global

Customer Assistance
Services (GCAS).

Duplicate Statement Fee

Waived

Waived

Waived

Overdue Penalty or Late

Payment Fee

Rs. 300 if Total Rs. 300 if Total Payment Rs. 300 if Total Payment
Payment Due is up
Due is up to Rs. 2000
Due is up to Rs. 2000;
to Rs. 2000 Rs. 400 if Total Payment Rs. 400 if Total Payment
Rs. 400 if Total
Due is between Rs. 2001 - Due is between Rs. 2001
Payment Due is
Rs. 5000
- Rs. 5000; Rs. 600 if
between Rs. 2001 - Rs. 600 if Total Payment Total Payment Due is Rs.
Rs. 5000
Due is Rs. 5001 or more
5001 or more.
38

Rs. 600 if Total

Payment Due is Rs.
5001 or more

Over Limit Penalty

3% of the over
limit amount (Min.
Rs 500)

3% of the over limit

amount (Min. Rs 500)

3% of the over limit

amount (Min. Rs
500)

Charge slip Retrieval Fee or

Copy Request Fee

Waived

Waived

Waived

Outstation Cheque Fee

Waived

Waived

Waived

Cheque return or dishonour

Fee or Auto debit Reversal
Bank A/c out of Funds

Rs 300

Rs 300

Rs 300

Surcharge on purchase or
cancellation of Railway
Tickets

As prescribed by
IRCTC/Indian
Railways

As prescribed by
IRCTC/Indian Railways

As prescribed by
IRCTC/Indian Railways

Fuel Transaction Surcharge

2.5% of transaction
amount or Rs. 10,
whichever is higher
(Refunded for fuel
transactions
between Rs. 400
and Rs. 4000)

2.5% of transaction
amount or Rs. 10,
whichever is higher
(Refunded for fuel
transactions between Rs.
400 and Rs. 4000)

2.5% of transaction
amount or Rs. 10,
whichever is higher
(Refunded for fuel
transactions between Rs.
400 and Rs. 4000)

Foreign Currency
Transaction Fee

3.50% of the
transaction value

3.50% of the transaction

value

3.50% of the transaction

value

Mobile Alerts for

Transactions

Waived

Waived

Waived

Hotlisting Charges

Waived

Waived

Waived

Balance Enquiry Charges

Waived

Waived

Waived

Charges

Platinum
Advantage

Standard Joining Fee

Standard Annual Fee

Rs 1000

Rs 500

Platinum

Titanium/Gold

Silver

Rs. 250 (Waived on

Rs. 500 (Waived on
spends of
spends of
Rs. 2500 within 45 days
Rs. 5000 within 45 days
of card setup), for cards
of card setup), for cards
setup on or after
setup on or after
February 07, 2011
February 07, 2011
Nil, for cards setup
before February 07, 2011

Nil, for cards setup

before February 07,
2011

Rs.200 (from 2nd year

Rs.100 (from 2nd year

39

Nil

Nil

onwards. Waived on
spends of Rs. 100000 in
the preceding year), for
cards setup on or after
February 07, 2011

onwards. Waived on
spends of Rs. 50000 in
the preceding year), for
cards setup on or after
February 07, 2011
Nil, for cards setup
before February 07,
2011

Nil, for cards setup

before February 07, 2011
Rs 100, for cards setup
before February 07, 2011

Standard Add-on Card Joining

Fee

Nil

Standard Add-on Card Annual

Fee

Nil

Rs 100, for cards setup

before February 07,
2011
Nil

Nil, for cards setup on or

after February 07, 2011

Nil, for cards setup on

or after February 07,
2011

Nil

Nil

Nil

Titanium: 3.25% per

month (46.78% per
annum)

3.25%
per
month
(46.78%
Gold: 2.95% per month
per
(41.75% per annum)
annum)

Finance Charges (Retail

Purchases & Cash)

2.95% per
month
(41.75%
per annum)

Cash Withdrawal Fees

2.5% (Min.
Rs 250) of
the Cash
Amount

2.5% (Min. Rs 250) of

the Cash Amount

2.5% (Min. Rs 250) of

the Cash Amount

2.5%
(Min. Rs
250) of
the Cash
Amount

Fee for Cash Payment

Rs. 50/-

Rs. 50/-

Rs. 50/-

Rs. 50/-

Waived

Waived

Waived

Waived

As per VISA Global

Customer Assistance
Services (GCAS).

As per VISA Global

Customer Assistance
Services (GCAS).

As per
VISA
Global
Custome
r
Assistan
ce
Services
(GCAS).

Waived

Waived

Waived

Waived

Rs. 300 if

Rs. 300 if Total Payment

Card Replacement (lost or

stolen or re-issue)

As per
VISA
Emergency Card Replacement
Global
Fee when overseas (through
Customer
VISA)
Assistance
Services
(GCAS).
Duplicate Statement Fee
Overdue Penalty or Late

2.95% per month

(41.75% per annum)

40

Rs. 300 if Total

Rs. 300

Payment Fee

Total
Payment
Due is up
to Rs. 2000
Rs. 400 if
Total
Payment
Due is
between
Rs. 2001 Rs. 5000
Rs. 600 if
Total
Payment
Due is Rs.
5001 or
more

Due is up to Rs. 2000

Rs. 400 if Total Payment
Due is between Rs. 2001
- Rs. 5000
Rs. 600 if Total Payment
Due is Rs. 5001 or more

if Total
Payment
Due is
up to Rs.
2000
Payment Due is up to Rs. 400
Rs. 2000
if Total
Rs. 400 if Total
Payment
Payment Due is
Due is
between Rs. 2001 - Rs. between
5000
Rs. 2001
Rs. 600 if Total
- Rs.
Payment Due is Rs.
5000
5001 or more
Rs. 600
if Total
Payment
Due is
Rs. 5001
or more

Over Limit Penalty

3% of the
over limit
amount
(Min. Rs
500)

3% of the over limit

amount (Min. Rs 500)

3% of the over limit

amount (Min. Rs 500)

3% of
the over
limit
amount
(Min. Rs
500)

Charge slip Retrieval Fee or

Copy Request Fee

Waived

Waived

Waived

Waived

Outstation Cheque Fee

Waived

Waived

Waived

Waived

Cheque return or dishonour

Fee or Auto debit Reversal
Bank A/c out of Funds

Rs 300

Rs 300

Rs 300

Rs 300

As
As
prescribe
prescribed
d by
Surcharge on purchase or
by
As prescribed by
As prescribed by
IRCTC/I
cancellation of Railway Tickets IRCTC/Ind IRCTC/Indian Railways IRCTC/Indian Railways
ndian
ian
Railway
Railways
s

Fuel Transaction Surcharge

Waived
(For fuel
Waived (For fuel
transaction
Waived (For fuel
transaction to be
to be
transaction to be between
between Rs 400 and Rs
between
Rs 400 and Rs 4000)
4000)
Rs 400 and
Rs 4000)
41

2.5% or
Rs 10
whichev
er is
higher

3.50% of
3.50% of
Foreign Currency Transaction
the
3.50% of the transaction 3.50% of the transaction
the
Fee
transaction
value
value
transacti
value
on value

Mobile Alerts for Transactions

Waived

Waived

Waived

Waived

Hot listing Charges

Nil

Nil

Nil

Nil

Balance Enquiry Charges

Waived

Waived

Waived

Waived

STUDY OF INDIAN MARKET

INDIAN CREDIT CARD SCENARIO
The credit card industry in India has registered an encouraging growth in recent times, but the usage
pattern of credit cards remains a point of concern, those in the industry say. Seven years back, India had
a base of around five lakh credit cards. There has been a seven-fold increase, with the number of
cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in
India is growing at a brisk annual rate of 30 per cent and is expected to grow at a similar rate in the
coming years. This fortifies the view that conservative purchasing ideas are giving way to the big in
thing. But it is the usability that raises doubts.
According to a survey by the Credit Card & Management Consultancy (CCMC), 71 per cent of first time
credit card applicants in the country have expressed the need for advice on appropriate card selection
despite the plethora of cards available in the market. Through this survey it has come to realize a long
felt need of potential and existing cardholders for advice on suitable selection of credit cards. The whole
idea behind the introduction of the credit cards was to increase the purchasing capacity of the
cardholder. With this in mind, the foreign banks launched a credit card blitzkrieg on the Indian customer.
The innovations have already begun to show their effect. The Standard Chartered Bank has seen its
credit card base shoot up after the launch of its Global Rupee Card in March last year.
It has seen the fresh issuance of global card increase by more than one lakh, and the bank now has a base
of more than half a billion. But the real challenge for the banks is to make the holder spend more on the
card. Going by estimates, India has a long way to be anywhere nears the matured markets. The markets

42

like the United States and England have an average annual card spend of 1,300 and 3,600 dollars
respectively.
The credit card players will have to think about simplifying the foreign exchange transactions. When
one uses the card, it is entirely his responsibility to make sure that exchange controls have been
complied with. The banks that issue the cards have made it abundantly clear that one has to look out for
him. It is upon him to find out the facts of regulatory life. The real point of worry is the spending on the
credit cards. According to estimates, the average card spending in India is even less than that in
Indonesia. Those in the credit card business say that per capita credit card spending in India is about five
hundred dollars (Rs 21,500), whereas in Indonesia, it is about 678 dollars (Rs 29,154). At present there
are over a dozen players in the credit card market in India, and the fact is the foreign banks are clearly
the leaders. The leaders will surely be identified by the innovations for the card users.
But the alarm has been raised for the banks by the figures that show that while the average usage in
Malaysia is 27 times annually, in India it is only 11 times. Some of the key factors impacting the cards
business in India are limited credit, wide geographical spread, limited telecommunication infrastructure
and emerging regulatory controls. The other players feel that the card acceptance base in India has to be
widened. Suggestions include credit card usage at petrol pumps and railway bookings.
They also point out that though the cards business has been in the country for long, but even today the
insurance premium cannot be paid by card. Though LIC is talking about the introduction of this facility
to customers, but its turning into reality may take time. There is talk of widening the card business with
new features, but the present scenario does not paint a positive picture, with many loopholes remaining
to be plugged.
Of the twenty million taxpayers in India, more than ten per cent of them are cardholders. Those in the
industry point out that this figure is not bad, considering the fact that; the cards business is still in its
initial stages. However, the players feel that the business has not reached an optimum level to say that
they are making money. Even the largest player in the Indian market does not still have the economies to
make the card business really profitable in India, despite the fact that it has more than one million credit
card holders. Less than two per cent of private consumption spending in India is done on cards.
While issuing the cards may seem to be easy, the challenge for the banks lies in being able to manage
their portfolios by keeping the delinquency levels at the lowest. Huge investments in systems and
infrastructure are, therefore, a necessity. The increase is being attributed to new ideas such as round-theclock functioning of card issuing banks and pulling out all stops even at a loss, to grab a sizeable share
43

of the expanding pie. Not to be left behind in this race, even the big brother, the ICICI Bank and AXIS
Bank entered the card business.
The spurt in the card business has gathered momentum during the past couple of years. For instance, the
Hong Kong & Shanghai Banking Corporation (HSBC), was in the credit cards business since seven
years, but from 50,000 card holders in 1997, it has about three lakh card holders now.

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

It was found that for the frequent travelers acceptability was the most important criteria and was given
the highest weightage.
Following attributes have been analyzed as per the consumer survey conducted
The attributes are as follows:
ACCEPTIBILITY
CREDIT LIMIT
CREDIT PERIOD
44

 MEDICAL AND HOSPITAL SERVICES

OTHERS

PROMOTION STRATEGIES
The changing trends in the payment systems are global and even in India revolve around the change in
customer needs and the evolution of financial markets. Traditionally Indians like to pay in cash or at the
most avail the services of a bank. As a result credit card companies had to educate the consumers and
spread awareness of the uses of its products. The companies have tried to address this issue through
promotional campaigns:
Placing of take away firms of credit card at more than a thousand merchant establishments.
Appointing of DSAs.
Using business magazines and newspapers for advertisement.
Mailing of forms along with contests to professionals and middle management executives etc.
Tapping the get member route.
Reducing their minimum eligibility criteria and changing income documentation structure.
Introduction of photo cards.
Tying up with durable consumer goods manufacturer (e.g. Oneida, 0Philips) to sell their
products.
Providing ATM facility to their card holders.
Travel assistance via tele-banking.

TIPS FROM BANKS TO SAVE CHARGES

FEE-HEAVY FOREIGN TRANSACTIONS
Many major credit card issuers charge a fee for card transactions in foreign countries. The cost of cash
advances is particularly onerous. When traveling abroad, carry a mix of plastic, cash, debit cards and
traveler's checks.
45

BETTER RATE
Just ask for acquiring new credit card customers is expensive and time-consuming, so issuers don't want
to lose creditworthy individuals. If you've had a year of on-time payments, call your credit card issuer
and ask for a cut on your interest rate.
CUT CREDIT CARD COSTS
Make payments on time, avoid cash advances and don't exceed your credit limit. Cash advances are
more costly as there's no grace period, so you pay interest from the day you take the money.
IDENTITY THEFT
The No. 1 identity theft is credit card fraud. New card accounts are opened or existing accounts are
taken over. The Federal Trade Commission offers a hotline and Web site for advice and tips.
SAVE STRESS WITH LESS DEBT
The stress of credit card debt has been directly linked to physical problems like heart attacks, insomnia,
explosive emotions, smoking, overeating and lack of concentration.

SHOP ONLINE WITHOUT THE WORRY

Credit card companies are switching to zero liability. If your credit card is misused on the Internet, you
won't be liable for online transactions charged by an unauthorized user. But zero liability doesn't mean
zero responsibility -- you'll have to meet certain requirements.
FRAUD ALERT
Placing a fraud alert on your credit files prevents an imposter opening credit in your name. The
downside is that you give up the convenience of "instant credit." You can't sign up for a new credit card
and go shopping with it three minutes later.
TEEN CONSUMERS
Credit card companies are targeting the increasingly powerful teen consumer. Teens get the credit card
and the bill, but parents are legally responsible. Nonprofit organizations caution that teens lack personal
finance teaching, and aren't ready for plastic
BE CAREFUL WHEN YOU DO THE CARD HOP
46

Changing credit cards for a better deal may net attractive teaser rates, but many cards now deter balance
transfers with tough terms and high costs. Read the fine print carefully.
SILENCING PHONE SOLICITORS:
You can pull the plug on telemarketers calling your home. The Telephone Consumer Protection Act
requires telemarketers to record your 'do-not-call' request and refrain from dialing you for 10 years.
CREDIT SCORE
During and after a divorce, you need to make a clean financial break to keep your credit report accurate.
A first step is to cancel credit card accounts, even if you were only an authorized user, and reapply for
new accounts.
DIGITAL WALLETS
Digital wallets, or e-wallets, are extensions of a consumer's credit cards. Basic e-wallets store cardholder
information, filling in account and personal information at cyber stores. They are convenient, secure
solution to shopping online.

DON'T FILL UP ON GASOLINE CREDIT CARDS

Gas company cards offering rebates on purchases can be worthwhile when gas prices are high. But the
annual percentage rate and the annual fee charged are higher than normal cards. People who carry a
revolving balance will find these cards much less rewarding.
CREDIT UNION CARDS
Credit unions usually have lower interest rates and fees than banks, though they tend to have fewer
choices than bankcards.
STUDENT CREDIT CARD CHOICES
Students and their families looking for the best student credit card need to focus primarily on annual fees
and interest rates. Generally, students with a work and credit history will find a regular credit card is the
best deal.
VARIABLE-RATE CARDS

47

The cost of using credit cards has increased. Variable-rate cards, the most common type in the nation,
tend to rise in step with the prime rate. The prime rate has gone in the Fed's efforts to cool the red-hot
economy, but spending hasn't been significantly reduced.
FINANCING VACATIONS
Most people finance vacations with their credit cards. Even the average credit card interest rate can turn
your vacation into a financial strain if you spend above your means and take up to a year to pay it off.
EMERGING CREDIT
Tweeners People with emerging credit or recovering credit -- can find good credit card deals. To get
the best deal they need to compare annual percentage rates, grace periods, credit limits, and fees, and
avoid credit cards with hefty application and processing fees.
AFFINITY CREDIT CARDS
Affinity credit cards (aka "charity" cards) may give you a sense of purpose to your spending, but can
cost more than your actual donation. Affinity cards carry high interest rates and annual fees. They have
more value if you don't carry a card balance.

STUDENT LOAN DEBT

Graduating college students face an average loan debt of more than $35,000, and it needs to be attacked
aggressively. First, concentrate on paying down credit card debt, and then tackle your student loan debt.
TAKING ADVANTAGE OF PROMO RATES
While introductory or "teaser rates" are generally short lived and are intended strictly to entice
consumers, savvy consumers can benefit a great deal from promotional rates. Look for cards that offer
longer term introductory rates and longer term promotional rates on balance transfers (6-12 months).
Some cards even offer very attractive long term promotional rates on balance transfers...rates that are
good until the dollar amount transferred is entirely paid off! Consumers that have more than one card
with available credit can transfer balances between cards in order to take advantage of promo. Transfer
rates (a ploy known as "card dumping"). Finally, when the promo. rate period ends (for transfers), it is a
good idea to call the card company and request an extension of the rate. Consumers with a good payment
history often get extensions. You must be aggressive when dealing with credit card companies! You can
48

also negotiate to have your regular interest rate lowered. Threatening to pay off a given card often puts
consumers in a bargaining position when dealing with credit card cos.
GRACELESS GRACE PERIOD:
Avoid cards that begin computing their grace period at the time of purchases, rather than billing. Only a
few cards still use this method of interest computing, but there are still some out there. Keep your eyes
peeled!

1. Which of the following attributes most attractive to open saving account in any
bank?
Attributes Compelled most to
open savings bank account

Percentage

ATM cum DEBIT CARDS

55%

Internet Banking/ Phone Banking

25%

Working Hours

5%

Value Added Services

15%

Total

100%

49

Percentage
ATM cum DEBIT CARDS

15%

Internet Banking/ Phone

Banking

5%
55%

25%

Working Hours
Value Added Services

Inference:
All those services is used to open or after opening a savings account. In above graph it is shown the
percentage of the users who uses ATM cum Debit Cards which is 55%, Cheques is use by 20%, Internet
banking or Phone banking is used by 5%, in working hours it is also 5%, and Value added services is
used by 15% persons.

2. Which types of services are more preferable?

Services prefers the most by
you

Percentage

ATM Services

55%

Internet Banking

10%

Mobile Banking

5%

Core Banking

15%

Retail Banking

15%

Total

100%

50

Percentage
60%

55%

50%
40%
30%
20%
10%

10%

15%

Percentage

15%

5%

0%

Inference:
All the persons want best services in every field. What services do you prefer the most in banks? As per
survey we are able to get the percentage of persons. ATM services 55%, Internet banking 10%, Mobile
banking 5%, Core banking 15%, Retail banking 15%.

3. In which of the following banks do you have an account?

In which banks do you have account

Percentage

ICICI Bank

15%

SBI Bank

65%

HDFC Bank

5%

Axis Bank

10%

Other Please Specify

5%

Total

100%

51

Percentage
65%
70%
60%
50%
40%
30%
20%
10%
0%

15%

10%

5%

5%

Percentage

Inference:
As per the survey we found that the persons have different account in many banks. The percentage of
bank in which you have an account- ICICI bank 15%, SBI bank 65%, HDFC bank 5%, Axis bank 10%,
other please specify 5%.

4. What type of account do people have in bank?

Type of Account in the
Bank

Percentage

Savings

72%

Current

13%

Fixed

10%

NRI

2%

Other please specify

3%

Total

100%

52

Percentage
80%
70%
60%
50%
40%
30%
20%
10%
0%

72%
13%

10%

2%

3%

Percentage

Inference:
As per the survey many persons have different account in different banks. The percentage of banks is
given below: - Saving A/c 72%, Current A/c 13%, Fixed A/c 10%, NRI A/c 2%, other please specify
3%.

5. What all are the services are offered by your bank?

Services offered by Banks

Percentage

D-Mat A/C

5%

Mutual Funds

10%

E-Instructions

35%

LI & GI

40%

Digitally Signed Statement

10%

Total

100%

53

Percentage
10%

5%

D-Mat A/C

10%

Mutual Funds
E-Instructions
40%

LI & GI

35%

Digitally Signed Statement

Inference:
As per the survey consumer want more or bet services from their banks. D-Mat A/c 5%, Mutual funds
10%, E-Instructions 35%, LI and GI 40%, digitally signed statement 10%.

6. How did people come to know about these services?

How would you know about these
services

Percentage

Advertisements

76%

Friends and relatives

13%

Direct Selling Agents

8%

Others please specify

3%

Total

100%

54

Percentage
8%

3%
Advertisements

13%

Friends and relatives

Direct Selling Agents
76%

Others please specify

Inference:
As per the survey consumer know about the bank services by the advertisements. Advertisements 76%,
Friends and relatives 13%, Direct selling agents 8%, others please specify 3%.

7. What people think about Banks?

People think about the Banks

Percentage

Necessity for protection security

60%

Imposition of a burden of expenses

26%

A compulsory tool for saving

8%

Others please specify

6%

Total

100%

55

Percentage
Necessity for protection security

6%
Imposition
of a burden of expenses
8%

26%

A compulsory tool for saving

60%

Others please specify

Inference:
As per the survey people have a positive thinking about the banks. Necessity for protection security
60%, Imposition of a burden of expenses 26%, a compulsory tool for saving 8%, other please specify
6%.

8. Does ICICI bank provide better facilities than SBI, HDFC & AXIS bank?
Comparison of facilities
between SBI, HDFC, AXIS &
ICICI Bank

Percentage

Yes

30%

No

25%

Cant Say

45%

Total

100%

56

Percentage

30%
45%

Yes
No
Cant Say

25%

Inference:
Comparison of facilities between SBI, HDFC, AXIS and ICICI bank Yes 30%, No 25%, Cant say
45%.

9. How would a person rate ICICI bank on the basis of service provide on100
points?
100 points on the basis of services
provided by ICICI Bank

Percentage

Less formalities

34%

Flexibility

46%

Less documentation

3%

Others

17%

Total

100%
57

Percentage
17%
34%

3%

Less formalities
Flexibility
Less documentation
Others

46%

Inference:
100 points on the basis of services provided by ICICI bank. Less formality 34%, Flexibility 46%, less
documentation 3%, others 17%.

10. What a respondent see in purchase of new plan from banks?

Purchase of new plan from

Percentage

Banks
Standing and goodwill of the company
Product range of the company
Advertisement being released by the

29%
26%
15%

company
Services being given by the company
Total

30%
100%

58

Percentage
Standing and goodwill of the
company

29%

30%

Product range of the company

Advertisement being released
by the company

15%

Services being given by the

company

26%

Inference:
A respondent see in purchase of new plan from bank. Standing and goodwill of the company 29%,
Product ranges of the company 26%, Advertisements being released by the company 15%, Services
being given by the company 30%.

11. How a person can rate the product offered by ICICI bank than other?
Opinion

High

Low

Ratings
1

25%

20%

15%

15%

25%

Total

100%

59

5
5
4.5

4
3.5

Ratings

2.5

High

Low

2
1.5

1
0.5
0

25%
0.2
0 1

15%
0.15

25%

Inference:
The above table shows that Rating 1, 3& 5 have higher opinion as 25% 15%, 25% respectively & 2 & 4
have low opinions as 20 & 15 respectively for the product offered by ICICI Bank.

12. How would a person rate services offered by ICICI bank?

Rate services offered by
ICICI Bank

Percentage

Poor

25%

Average

55%

Good

10%

Excellent

10%

Total

100%

60

Percentage
10%

25%

10%

Poor
Average
Good
Excellent

55%

Inference:
As per survey from the people that the services offered by the ICICI bank. Extremely satisfied 25%,
Satisfied 55%, Moderate 11%, Dissatisfied 5%, extremely dissatisfied 4%.

13. What type of value added services does ICICI banks provide?
Value added services

Percentage

Young star

15%

Senior citizen

15%

Pre-paid card

55%

Recurring deposit

10%

Others

5%

Total

100%

61

Percentage
5%

10%
Young star

Senior citizen

15%

Pre-paid card

15%
Recurring
deposit

Others

55%

Inference:
As per the survey the value added services provided by the ICICI bank- Young star 15%, Senior citizen
15%, Pre-paid card 55%, Recurring deposit 10%, others 5%.

62

CHAPTER 5
FACTS AND FINDING

The banks battle today is more with cash than with other banks. Considering the huge potential of
the Indian market, it is in the interest of the issuers to educate the consumers about the benefits of
holding credit card.

The campaigns must also be convincing enough to clear the myth that credit cards increase spending.
Focus should be on changing non-card related spending to card related spending.

The issuers must focus on service and pricing and must recognize the importance of the billing and
payment process to retain credit card holders.

The credit cards schemes would be successful only if they meet the customers requirement of wider
acceptability rather than fringe benefits like non-crisis credit or prestige proposition.

Emphasis should be on offering a wider basket of services through credit cards enabling purchases
for a wide variety of products along with ATM usage, backed by much more comprehensive
merchant establishment network.

The banks must also increase the number of cardholders by reducing the initial-one time
subscription fee. The banks should step up advertising that will help to build a brand image and
create a higher brand recall like that of Citibank.

With more and more people willing to adapt to credit cards, banks should undertake innovative
strategies to increase card spends. Simultaneously, to cater to high net worth customers and those
with niche needs, banks should provide more of premium plastic and CO-cards that piggyback on
the existing infrastructure, but provide holders with exclusive add-ons.

Future promotions could include: Telemarketing, direct sales, direct mail, promotional advertising
through media, common ATM services between banks (to reduce cost of operations), schemes like
card carnival and sales executives contests and a plethora of augmented services should be
introduced to induce greater number of people to adopt to plastic money.

63

CHAPTER6
CONCLUSION AND SUGGESTION
In India the situation is far from satisfactory to use the credit cards as a means of making payments for
online purchases for the following reasons;
1. Use of credit cards is popular to only a few thousands of executives, businessmen, etc from big
cities.
2. That any person using credit card is liable to declare IT made many people surrendering their cards.
In other words if credit card is made the payment mechanism, only IT payers will be eligible to buy
goods online.
3. Still many leading credit card companies are yet to install their infrastructure to process the online
payments.
4. Then there is the question of sales tax laws Each State has its own rate of tax structure for each and
every commodity. How to charge tax when a transaction takes place online and at what rate will pose
problems of billing.
5. Many establishments do not like to offer credit card facility due to the service charges to be paid to
credit card companies. They get the payment only after a certain period of time once the goods are
sold. Both of them make the profit margin less.
As mentioned earlier, the fraud element is always there. In view of all these factors, use of credit cards
cannot be expected to boost the sales of online sales, particularly business to customer.

Suggestions for enhancing the use of credit cards:

Efforts must be made to make credit cards popular amongst the common man.
Many leading brands and showrooms accept the credit cards, but there are others who do not such
companies must be encouraged to accept the credit cards.
Payments by electronic cash/cheque may be made legally valid including electronic signature. I
believe once the cyber laws are passed by GOI, this is possible.
Service charges on the use of credit cards must be minimized.

64

 Each merchant/shopper can allot a secret code number to the existing clients (customers). On receipt
of this code number, the goods can be dispatched by VPP and other modes of dispatch, which will
ensure collection of payment against delivery. However, this facility can be extended only to existing
customers.
Banks should be asked to immediately create necessary facilities for any of the a/c holders to operate
the a/c through online. Once a purchase is made, the a/c holder can transfer the required amount to
the merchant A/C online. The merchant bank can intimate the shopper about the transaction. All
these activities can be carried out instantly though proper programming. Activity can be made part of
the ordering activity.
Large organizations can issue authorization letters to each of their employee who wants to avail the
online purchasing facility and device a mechanism through which the company itself pays the
merchant his dues. This would require installation of transaction servers in the companies or can be
integrated with their online business activity.
Government establishments can device a mechanism to enable their employees make online
purchases. These are all some of the ideas to making the online purchases easier and smoother
without affecting the payment due to the shoppers.
They may look difficult to achieve but with proper programming techniques and the use of appropriate
servers, they can be easily achieved. In conclusion, payment through credit cards will not result in
increasing the online shopping as generally believed. We need to device different mechanisms taking
into account Indian laws, shoppers requirements, banking practices prevalent in our country.

BIBLIOGRAPHY
65

Books
The Credit Card Cure: Ryan Rockwood, Mike Rockwood
Credit Card Debt- Reduce Your Financial Burden in Three Easy Steps: Alexander Daskaloff
Drop Debt- Surviving Credit Card Hell without Bankruptcy: Harvey Z. Warren
Philip Kottler.

NEWS PAPERS
Times of India
Hindustan Times
Economy Times
Financial Express
The Hindu

NEWS CHANNELS
CNBC
TV 18
Zee News

WEBSITES
www.icicibank.com
www.axesbank.com
www.investopedia.com
www.howstuffworks.com
www.businesscreditcards.com
www.google.com

QUESTIONNAIRE

66

Customer Personal Information

i.

Name:-

ii.

Age:-

iii.

Gender: -

Male

iv.

Income: -

10,000 25,000

Female
25,000 50,000

50,000 1,00,000

1, 00,000 and Above

v.

Occupation:-

1. Which of the following attributes most attractive to open saving account in any
bank?
a) ATM cum DEBIT Cards
b) Internet Banking/ Phone Banking
c) Working Hours
d) Value Added Services

2. Which types of services are more preferable?

a) ATM Services
b) Internet Banking
c) Mobile Banking
d) Core Banking
e) Retail Banking

3. In which of the following banks do you have an account?

a) ICICI Bank
b) SBI Bank
c) HDFC Bank
67

d) Axis Bank
e) Other please specify __________________

4. What type of account do people have in bank?

a) Saving
b) Current
c) Fixed
d) NRI
e) Others please specify ________________________________________

5. What are the services are offered by your bank?

a) D-Mat A/C
b) Mutual Funds
c) E-Instructions
d) LI & GI
e) Digitally Signed Statement

6. How did people come to know about these services?

a) Advertisements
b) Friends and Relatives
c) Direct Selling Agents
d) Others please specify _______________

7. What people think about Banks?

a) Necessity for protection security
b) Imposition of a burden of expenses
c) A compulsory tool for saving
d) Others please specify ________________

8. What a respondent see in purchase of new plan from banks?

a) Standing and goodwill of the company
b) Product range of the company
c) Advertisement being released by the company
68

d) Services being given by the company

9. Does ICICI bank provide better facilities than SBI, HDFC & AXIS bank?
a) Yes
b) No
c) Cant say

10. Do you know what type of value added services provide by ICICI BANKS?
a. Young star
b. Senior citizen
c. Pre-paid card
d. Recurring deposits
e. Other

11. How would you rate product offered ICICI BANK than other?
Low 1 2 3 4 5 High

12. How would a person rate ICICI bank on the basis of service provide on100
points?
a) Less formality
b) Flexibility
c) Less documentation
d) Others
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13. How would you rate services offered by ICICI BANK?

a) Poor
b) Average
c) Good
d) Excellent

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