Rivals cock a snook at ICICI credit card move

Credit card issuers are unruffled at ICICI Bank's marketing coup making all its credit card offerings free for life.

The refrain of ICICI's competitors is pricing is not the only issue that drives credit cards business. A lot depends on value addition provided by offerings made on credit cards.

"Pricing is important, but a lot depends on the overall offerings on the credit card. We don't want to just issue credit cards which will never be used," said Pralay Mondal, head-credit cards, HDFC Bank.

HDFC Bank has provided the market leader stiff competition in incremental credit card issuances in recent months. HDFC Bank issued over one lakh cards per month since April 2005, against five lakh cards issued by ICICI Bank in the first four months of 2005-06.

A Standard Chartered Bank official said the bank does not "feel the need" to offer free for life credit cards now. Standard Chartered has a business strategy but it does not include offering of free credit cards.

HDFC Bank's Mondal said the bank has issued 17 lakh credit cards till now and is confident of carrying on issuing one lakh credit card every month for the rest of the financial year. He was talking at the launch of Titanium Card in association with MasterCard International for the bank's prime customers.

ICICI Bank has taken a substantial lead since it overtook Citibank to become the number one credit card issuing bank. ICICI Bank has issued over 35 lakh credit cards against Citibank's 27 lakh. Citibank declined to comment on the competition's decision to offer free credit cards.

"The Indian customer is price-sensitive, but HDFC Bank will not give credit cards free. The value of services that we offer will be much greater than the annual charges levied," said Parag Rao, head - product and portfolio management, credit cards at HDFC Bank.