IMGCAP(1)]
Banks in India have slowed their aggressive selling of credit cards because of the global economic crisis, which has left many issuers with huge losses, industry sources tell CardLine Global. "Rising delinquencies have forced these banks to take a re-look at their acquiring processes," an official at the Reserve Bank of India who requested anonymity tells CardLine Global. "No longer will you see them pushing to lend unsecured credit." According to the official, many banks were issuing credit cards without any due diligence. "Earlier, you could get more credit cards from almost every bank if you already had a credit card," says an official at one of India's largest private banks who also wished to remain anonymous. "Your repayment capability was never properly appraised." According to the official, such practices led to a sharp rise in noncreditworthy consumers receiving credit cards. "The slowdown, not surprisingly, saw many of these cardholders [miss] their payments, and delinquencies shot up," the official says. According to the official from the Reserve Bank of India, many card issuers also went overboard with offering such incentives as no annual fees and free secondary cards. "But with Indian cardholders mainly using the primary cards, these add-on cards remained unused even as the costs of issuing and operating them went up," he says. "So do not be surprised if banks end up now bringing back these fees and perhaps introducing new ones to maximize their income."
