Credit card holders decline in number
By Ankit Sharma
May 18, 2010
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The number of credit card holders has shown a decline as per reports generated in March. The number has dipped below the 20 million mark and now stands at 18.3 million.

The report confirming this decline has been released by the Reserve Bank of India. The last fiscal saw a massive chunk of 6.04 million cards walking out of circulation. This figure is exclusive of the nearly 3.61 million credit cards that were cancelled in 2008-09.

The economic slowdown had brought tremendous affect on unsecured portfolios like credit cards and personal loans. The largest credit card lender of the country, ICICI Bank diminished its credit card base from 8 million to 5 million as of now. The bank also stopped giving life time credit cards.

However, banks like HDFC still bring out 70-80,000 cards every month. HDFC Bank has the second largest credit card network in the country, with 4.3 million cards as of March 31.

Issuers are now focusing on increasing the card spend on each card rather than increasing their numbers. The monthly credit card spending of Standard Chartered Bank has increased from Rs 250 crore last year to Rs 400 crore. "We are aiming for a target of Rs 500 crore per month soon. Ours is a highly rewards-driven programme, concentrating on what works with customers," said Shyamal Saxena, general manager of retail banking at StanChart.

"The focus for the last three years has been the premium segment and losses from this segment are significantly less than from other segments," said a senior executive of a large foreign bank.

"I would prefer to have 5,000 high-end customers rather than 20,000 premium segment customers," the executive added.



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