ICICI Bank Becoming More Selective with New Credit Card Customers
Posted by sushilgirdher on November 14th, 2008
ICICI Bank India’s second largest bank and the country’s largest credit card issuer has decided to ease up on the growth of its credit card business following in the same footsteps of Standard Chartered Bank as was reported here a couple of weeks ago. In fact seeking better quality clients that are more likely to repay their obligations has been a long running theme within Indian retail banking over the last few months, as the rush to grab market share at any cost including compromising on credit quality has clearly not paid off.
ICICI bank faced with a slowdown in economic growth and an increase in delinquencies and defaults is slowing down expansion of its credit customer base and focusing instead on improving credit quality of its clients.
ICICI Bank claims to have issued over 9 million credit cards and has an unsecured credit card portfolio valued at Rs 9,600 Crore or US$ 192 Million. That represents a whopping 60% increase in the value of that portfolio from just a year earlier. In a statement to the Economic Times ICICI Bank’s head of cards Sachin Khandelwal said “We have become very cautious on new customer acquisitions and now looking at good customers only. We have tightened the credit norms and looking at fewer new customers.”
ICICI Bank now requires that card holders with high value purchases must opt for monthly repayment schemes. in order to contain the possibility of default. Industry indications are that the delinquency rate for the local credit card industry has risen to 10-14 %, compared to 9-12% a year ago. Mr. Khandelwal commented “We keep tracking customers’ credit worthiness regularly and revise the credit limits as deemed appropriate based on their credentials”.
ICICI Bank indicated that the demand for new cards from customers has also slowed down as the global financial crises loomed large on the psyche of its customers. In another precautionary step, the card issuer is advising existing customers to shift some high value transactions to monthly repayment options. “This is to help them reduce their monthly outgo and plan better when doing with high value purchases,” An ICICI Bank spokesman said. It has already raised the interest rate on revolving credit to 3.4% per month this June from 3.15% per month earlier
ICICI bank faced with a slowdown in economic growth and an increase in delinquencies and defaults is slowing down expansion of its credit customer base and focusing instead on improving credit quality of its clients.
ICICI Bank claims to have issued over 9 million credit cards and has an unsecured credit card portfolio valued at Rs 9,600 Crore or US$ 192 Million. That represents a whopping 60% increase in the value of that portfolio from just a year earlier. In a statement to the Economic Times ICICI Bank’s head of cards Sachin Khandelwal said “We have become very cautious on new customer acquisitions and now looking at good customers only. We have tightened the credit norms and looking at fewer new customers.”
ICICI Bank now requires that card holders with high value purchases must opt for monthly repayment schemes. in order to contain the possibility of default. Industry indications are that the delinquency rate for the local credit card industry has risen to 10-14 %, compared to 9-12% a year ago. Mr. Khandelwal commented “We keep tracking customers’ credit worthiness regularly and revise the credit limits as deemed appropriate based on their credentials”.
ICICI Bank indicated that the demand for new cards from customers has also slowed down as the global financial crises loomed large on the psyche of its customers. In another precautionary step, the card issuer is advising existing customers to shift some high value transactions to monthly repayment options. “This is to help them reduce their monthly outgo and plan better when doing with high value purchases,” An ICICI Bank spokesman said. It has already raised the interest rate on revolving credit to 3.4% per month this June from 3.15% per month earlier