Indian banks increasingly are cutting the credit limits for their cardholders to reduce risk within their credit card portfolios, banking officials confirm.
“There has been some paring of our credit card portfolio in this regard,” an official from the Mumbai-based Bank of Baroda tells PaymentsSource, requesting anonymity. “There was imprudent issuance of cards without due diligence, mostly by direct selling agents. … The correction is to curb that damage.”
PaymentsSource also contacted India’s largest credit card issuer, State Bank of India, where an official again on the condition of anonymity confirmed it was cutting spending limits on credit cards. “We are doing this mainly with inactive credit cards,” he says. “Issuing a larger unused limit is an issue for the bank, as technically one can use it at any time.”
According to the official, most card issuers have reduced their card exposures significantly during the past year. PaymentsSource also contacted ICICI Bank Ltd. and HDFC Bank Ltd., but both declined comment.
