Delhi, India (PressExposure) March 09, 2009 -- Credit card defaults had always been one of the major issues of Banks. Presently, the SBI cards and the ICICI banks are badly hit by such defaulters for the second consecutive year. Due to this reason, both of them have raised their criteria for delivering credit cards. Salary structure and other norms have been tightened so as to control losses and deliver credit cards only to those who have the ability to pay back.
Infact, a detailed study by the Indian arm for global rating agency, commonly known as the CRISIL Ltd, revealed that more losses will be faced in the present year, by the SBI cards and Payment Services Ltd. The present recessive market has infact, exposed banks to further credit losses because of the reduced monetary conditions of people and wide spread job cuts. The ICICI banks may be better off than the SBI for the year 2008 but it had a profit of only 85.7 crores compared to the huge investment of 5683 crores.
For this reason, SBI cards have increased credit checks and have raised the salary margin from the earlier limit of 1.44 lakhs to 2.4 lakhs per annum in the present financial year.
However, what the ICRA announced is also notable. According to the ICRA, it is high time that the SBI Cards pump in capital in order to meet the newly regulated rules and norms for credit issue. However, though statistics indicated a loss of 150 crores in the year 2007-08 compared to the net profit of Rs 60 Crores for the year 2006-07, credit cards issue still remains one of the best business scope for banks.