HSBC skirts credit card norm

Co-branded Trent card will be issued sans income proof

Hongkong and Shanghai Banking Corporation (HSBC) seems to have turned a blind eye to the Reserve Bank of India's (RBI) draft guidelines on credit cards.

HSBC and retailer Trent Ltd have launched a co-branded card that offers 10 per cent discount on monthly grocery purchases. The private label credit card is being offered to customers of Trent's hypermarket Star India Bazaar without seeking any income proof.

HSBC's move to do away with the requirement of income proof, however, goes against the spirit of the RBI draft guidelines on credit cards that says banks must be responsible and issue cards only to those with independent financial means after completion of all know your customer (KYC) requirements.

Puneet Chaddha, head, cards and retail assets, HSBC, however, said, "Housewives will be the target customers for the card and this category of consuming class cannot be treated as without any income source. The credit limit on the card will be as low as Rs 3,000 to start with and is unlikely to create any credit hassles." The card is being aimed at the 46.4 million consuming class households.

Meanwhile, American Express and ICICI Bank also announced the launch of two new cards.

American Express has launched the first tri-brand credit card in association with Hindustan Petroleum and ICICI Lombard, providing cashless claim settlement at 400 garages across 70 cities and discounts on purchases at FabMalls and Planet M music stores. While ICICI Bank has launched Travel Smart MasterCard, which offers a 10 per cent cash-back on purchase of air ticket of any airline through the card.

For availing of the cash-back offer and discounts at hotels, ICICI Bank said the customer would have to make bookings through its partner, Makemytrip.com.

The card can be used to buy domestic and international flight tickets at both apex and super apex fares. The card also offers upto 20 per cent discounts at over 2000 restaurants across India.

American Express' tri-branded card would ease payment of motor insurance premium on a quarterly, half-yearly or an annual basis. The card is called rewards, privileges and more (RPM).

American Express vice-president and country manager K L Muralidhara said, "Convenience of paying motor insurance premium over time at zero per cent interest and cashless claim settlement at 400 garages are the key features of the card. The card also offers a one percentage point waiver on interest rates on personal loans."

The efforts of the credit card issuing banks is to expand the market, which at 10 million cards is still nascent compared with the more matured markets. The US has a total credit cards base of over 1.2 billion.