Citibank Commercial Credit Card for Corporates

Citi India has unveiled a commercial credit card for the Indian corporates. The significance of this card is that it comes with an embedded chip which captures the transaction information as soon as the card is used and sends the data to the corporates transaction management system. This helps in the cumbersome reimbursement and approval procedures.

The card also offers uniform global solutions to integrate expenses from all their branches around the world meeting accounting requirements of that particular country covering 45 countries. The card can also limit / restrict purchases to certain categories according to corporate rules. The card has been issued in association with VISA and MasterCard.

Individuals as well as Small Businesses may not be eligible for this card.

Education Loan Denied on Credit History Problems

A reader of our site has written to us that he was denied an educational loan for his son's higher studies due to his below average credit history [His history is not bad, but is below average].

Reader Writes,

I applied for education loan for my son for admission to engineering college . Loan was applied with State Bank of India main branch ,LUCKNOW. The loan was declined for reasons that overdue outstanding on my 5 credit cards for Rs 58,889. Sir on my asking to give the bifurcation they said that CIBIL does not give the details, later on my own calculations i cleared and paid Rs 73,850 on my 5 credit cars.

Can now the loan be sanctioned. Secondly on one hand the RBI says that credit card companies are charging exorbitant interest rates and on the other hand loan like education loan is being rejected for dues on fathers credit cards. Kindly advise me as to where i should approach for clearing the education loan for my son., to also inform you that the credit cards payments were with held by me because my utmost priorty was to get admission and pay the requisite fee in time. Looking forward for a help in this regard.

Our Response:
Since you have already cleared the dues on your credit card, you should look forward for a positive response from SBI. The Finance Minister has already made it clear that PSU banks cannot deny education loan to students. The ministry has also cleared the ambiguity on certain clauses like the loan should be applied in the same district where the student and the guarantor are residents of - Finance Ministry has said that this is impractical.

A senior officer of joint secretary rank has been appointed to look into all education loan-related grievances which are addressed to the finance minister or the ministry.

Kindly re-apply with your bank showing all documents that you have paid off your credit card debt and also mention to them that PSU banks cannot deny educational loans as per finance ministry directive.[PDF] Give them 8 working days time. If they fail to respond, take up the matter with Finance Ministry with CC to SBI GM Lucknow and SBI Headquarters, Mumbai.

Why heavy interest by Credit Card Companies ?

The Credit Card companies appealed to the Supreme Court to stay the 30% ceiling on interest charged on credit cards. However, the SC has refused to stay the order and has issued notice to the RBI, under whose purview these companies function.

You must be inclined to know why Credit Card companies charge such high interest rates and here is the list they furnished in the SC.

• call center and phone banking services
  
• courier and cost of embossing the card
• cost of sending monthly account statements
• cost of providing internet banking facility
• waiving charges for service reasons
• marketing and promotional offers
• rewards and loyalty programme

We really hope that the RBI will intervene with a response favoring the customers and not the CC companies. Maybe, this is the first test to the newly appointed RBI Governor.

Andhra Bank Credit Cards For Non Account Holders

Andhra Bank is planning to expand its Credit Card customer base and business significantly. Andhra Bank followed the same strategy as HDFC Bank where credit cards were issued only to existing bank account holders.

Mr. R.S.Reddy MD of andhra Bank said,

Instead of worrying about defaults and exiting from the business, I want to compete with others by putting sound systems in place. We are revamping the recovery team.

The bank intends to focus on lending to Large Corporates and SMEs from the current model of PSU financing. We will hope Mr. Reddy will come up with really unique business model where its a win-win for bank as well as credit card customers.

Citi Appeals 30% Interest on Credit Card Ceiling

Citi, the beleaguered financial company has appealed the order of National Consumer Disputes Redressal Commission[30% APR ceiling on credit card] in the Supreme Court. The matter will come up for hearing on Sept-8th.

Citi in its argument is taking shade under the RBI laws which didn't fix any ceiling on Credit Cards, which are treated as unsecured loans. Citi in its defense said,

The imposition of the upper cap of interest to a degree turned non-priority sector lending into priority sector lending. The NCDRC failed to appreciate that the market in India is still developing and the risk of default is relatively high and legal remedy has its own costs.

Legally, it looks like Citi is going to have its way. However, lets hope the Supreme Court gets into the judicial activism mode and orders the RBI to review Credit Card policy and sing in tune with NCDRC order of fixing the ceiling at a limit of 24% rather than 30%.

Bajaj Allianz Credit Cards

Bajaj Allianz financial distributions is planning to launch the Credit Card distribution business within the end of this year. This means the company will not issue any cards on its own but will tie up with banks and credit card companies for the same.

The cards will be sold under the Bajaj Allianz brand name while the settlements are to be done by the partners. So this also means partners have to approve prospective customers credit card application and that will not be in the hands of Bajaj Allianz. We'll keep you updated on the same.

You cna now apply for Kotak Credit Cards here.