The callousness of credit card firms
The other day, when I was attempting to book some airline tickets online, the travel website I was using warned me that it would accept my credit card only if it had been issued in India. A credit card issued overseas, regardless of the colour of the plastic (Silver, Gold, Platinum, Titanium, whatever) was not acceptable. On investigating, I found similar warnings up not only on other airline e-booking websites, but other e-commerce websites as well.
This marks quite a change from the early 1980’s, when I first became the proud owner of an Andhra Bank credit card. The first bank to issue credit cards in the country had given me a princely credit limit of Rs 5,000 per month. And the card proclaimed in embossed letters that it was valid only in India and Nepal, at that time one of the very few places on earth where an Indian could become richer simply by crossing the border with a wallet full of rupees (another thing which has changed, as a relentlessly appreciating rupee pushes us remorselessly into the category of the “haves”, like it or not).
The earlier ban was because of the parlous state of the country’s foreign exchange reserves, and the official emphasis on “priorities”. The new ban — on overseas cards — is because of the weakened state of online security and repeated instances of stolen credit card information being used to perpetrate frauds in India. In fact, Kingfisher, which had been the target of a sophisticated attack, actually lodged a complaint with the police, and was the first to stop accepting credit cards issued overseas.
That might be a bit of a nuisance for a genuine traveller from overseas, but the company is only taking reasonable precautions to prevent further fraud. But there is a big question mark over the underlying assumption behind such moves — that credit card issuers would have conducted their due diligence, and by restricting transactions to cards issued in India, you are reducing the risk of fraud.
Given the rate at which banks are doling out credit cards, I doubt it. Not only do they hand out free cards (or offers for the same) like they were going out of fashion, but suffer remarkable bouts of amnesia when it comes to actually shutting down an account.
For the past several months, I have been earnestly trying to reduce the number of credit cards in my possession. Under one pretext or the other, the banks which originally issued them — have simply refused to do so.
The RBI’s guidelines on this are pretty clear: “Banks/NBFCs should independently assess the credit risk while issuing cards to persons, specially to students and others with no independent financial means.
“(b) As holding several credit cards enhances the total credit available to consumers, banks/ NBFCs should assess the credit limit for a credit card customer having regard to the limits enjoyed by the cardholder from other banks on the basis of self declaration/ credit information.
“(c) The terms and conditions for issue and usage of a credit card should be mentioned in clear and simple language (preferably in English, Hindi and the local language) comprehensible to a card user.”
I currently hold about half a dozen cards, issued by a mix of private, MNC and public sector banks. Not even one has followed the guidelines. They do not even give you information about where you can access the information!
Much noise has been made about KYC (know your customer) norms. I think the powers that be should also look at issuing some KYS (know your supplier) norms.