RBI measures for Fraud Prevention

The Central Bank has finally woken up and has recommended measures to prevent Credit Card Frauds or at least minimize the same. RBI has recommended the following measures to be taken by every credit card issuer,

• Mandatory SMS facility for Online Transactions over Rs 5,000 [ However, some banks like ICICI are sending the SMS for every Online Transaction and it is a good move in our opinion]
• Separate Password protection for all Online Transaction. Your CVV is not enough, the hacker will need a password as well. [ Recall we have already written about this feature w.r.t HDFC Bank Cards - MasterCard SecureCode for Online Transactions ]
• Secured Transaction mechanism for customers doing business on IVR - Interactive Voice Response Systems

All these measures have to be fully implemented by each and every credit card company operational in India under the guidelines of RBI.

Credit Frauds in India

ICICI Bank topped the list of Credit Card Frauds with a total of 8,280 complaints involving Rs 11 crore [USD 2 mn] between April and Dec of 2008.

HSBC came next with total complaints of 2,484 cases involving Rs 4,90 crore while American Express Cards lost Rs 6.04 crore on 703 complaints. Citibank, incurred a loss of Rs 4.73 crore, Deutsche Bank loss of Rs 2.09 crore and Standard Chartered Bank Rs 2.39 crore.

No cases were reported by IDBI Bank, Canara Bank and Indian Overseas Bank related to credit card frauds. That's surprising!!!

PNB Visa Global Credit Cards hit the market

Punjab National Bank which promised Credit Cards last April has finally launched and is really serious about gaining customers. The company is giving first preference to existing customers with good banking and track record.

PNB has launched Visa Global Gold and Classic Credit Cards:
There is no Joining or Annual fees on the card currently. They are also offering 2 FREE Add-On cards [make sure you give it to someone who can use it wisely] and SMS Alerts for transactions.

1 Reward Point for every Rs 100 spent using the card [once upon a time it used to be Rs 50] and 200 bonus points on your first purchase.

Irrespective of the banks or financial institutions APR / Interest on credit cards is always high [23.67% annually for PNB Card] so you know what you should be doing :-)

We found PNB Card Balance Transfer facility attractive:

• 0% for facility for 90 days Or
• 0.99% p.m. for Balance Transfer facility under EMI scheme for period of six months
  

Foreign Currency Transactions carry a mark-up fees of 3.5% on the amount and Indian Railway bookings cost you an additional 2.5%.

Contact Details:
0120 - 4616200 1800 180 2345 (for MTNL / BSNL users) or visit pnbcard.com

Supreme Court stays Cap on Interest for Credit Cards

This comes as a shock as the Supreme Court of India's decision is against the interest of the Indian consumer. You may recall that last July, a consumer court had capped the interest rate on Credit Cards at 30%. The consumer court decision really made sense, but we got to honor the Supreme Court's decision and pay APRs as high as 40% now. Ridiculous!!!

Citibank, HSBC and Standard Chartered bank's credit card division had appealed against the interest rate cap. It is really pathetic that these banks are looting the ill-informed Indian consumer and yet the RBI has decided to turn a blind eye.

The Finance Ministry along with RBI can come out with regulations and cap the rate of interest on credit cards at a maximum of 18%. We don't like 30% or 40% which is totally unethical and pathetic business practice. Do you think this will ever happen ?