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The country’s largest private sector bank was once the most aggressive card issuer but has been cautious on this business since the 2008-09 financial crisis, due to a high delinquency rate. In March this year, Business Standard had reported that the bank had started expanding its credit card base after a gap of almost four years.
“Our delinquency rate is now among the lowest. We have increased our new acquisitions and plan to add close to half a million cards this year. But we are more interested in increasing the number of our active cards,” said Rajiv Sabharwal, executive director. He says a little over 90 per cent of ICICI’s cards are actively used by its customers.
Their credit card portfolio is estimated at Rs 3,000 crore and growing at 20 per cent annually. The bank will continue with the strategy of offering new cards primarily to customers already having a banking relationship with it.
The credit card base of banks has started increasing in the past couple of years. The number was 19.15 million at the end of June, compared to 18 million a year earlier.
However, in recent months, the numbers for the country’s largest credit card issuer, HDFC Bank, shrunk for the first time in many months. At the end of June, its credit card portfolio was 5.94 million, the lowest since August 2012. On the other hand, ICICI’s credit card portfolio rose to 2.95 million at the end of June, from 2.89 million a month earlier.
On Thursday, the bank introduced a new credit card, with a keypad and alpha-numeric LCD screen. It would provide better security for online transactions, it said.
The new card, Carbon, has been developed in partnership with Visa. “ICICI Bank Carbon is Asia’s first credit card powered by Visa CodeSure, which along with EMV chip technology, makes the card one of the safest for any usage, especially for online shopping,” the lender said.
The card will be available at an inaugural one-time fee of Rs 1,000 and there will be no annual fees in subsequent years. To use it, the holder initially needs to generate a CodeSure PIN on the bank’s website. This will be a one-time activity. Using this, one generates a one-time-password (OTP) on the card itself. The LCD screen on the rear of the card will show the OTP, which can be used to authenticate online transactions. So, even if somebody has fraudulently accessed the card number, he will not be able to carry out an online transaction without the CodeSure PIN and OTP, explains ICICI. Also, if the holder loses the physical card, a swindler cannot use it to make online purchases, as the CodeSure PIN is exclusive to the customer.
“This is India’s first intelligent credit card,” added Sabharwal. The multiplicity of credit card frauds in the recent past has bankers worried. While oversights, deviations from existing controls, collusion between bank employees and external parties sometimes lead to fraudulent transactions, customers are also exposed to fraud due to negligence on their part.
“This is a crucial step towards further securing electronic or card-not-present transactions -- a dynamic passcode through an integrated screen on the card,” said Uttam Nayak, group country manager – India and South Asia, of Visa.
