IMGCAP(1)]
India suffers from a lack of data that can help issuers judge the ability of consumers to pay back credit card bills, which leads to late repayments and defaults, a spokesperson for the Indian arm of Citibank tells CardLine Global. Default rates average 14% to 16%, according to Prathima Rajan, a Bangalore-based analyst for United States-based Celent LLC. The shortage of data in the Indian card market persists despite the work of the Credit Information Bureau of India, an agency the government established in 2000. The bureau's members, which include banks and other financial institutions, have access to card information the government gathers. But only members that have submitted their credit data can use reciprocal information from the bureau. Another problem is that increasing competition among issuers has led to less "due diligence" in screening card applications, Rajan says. And "some banks have lately started outsourcing some card related [tasks] like application processing, scrutiny and background checks to service providers who do not take the entire process as a serious affair," she adds.
