It
is an area where Indian banks had rarely ventured in the past but the
concept ofcredit
cards for
the uber-rich is fast gaining popularity among local lenders.
Superior
credit quality, large ticket transactions, and the opportunity to get
high-profile clients have made ultra-premium cards a necessity in
private banks’ product portfolio.
These
cards were a forte of foreign lenders such as American
Express Banking Corporation,
Citi,
Standard
Chartered Bank,
and Hongkong and Shanghai Banking Corporation till mid-2010. But
Indian banks have now started gaining market share in this
business.Axis
Bank,
HDFC
Bank
and ICICI Bank were among the first domestic banks to enter this
space.
|
CREDIT
CARD PORTFOLIO OF BANKS IN INDIA
|
|
|
Bank
|
Credit
cards (in million)
|
|
HDFC
|
5.9
|
|
ICICI
|
2.8
|
|
State
Bank of India
|
2.4
|
|
Citibank
|
2.3
|
|
Standard
Chartered
|
1.3
|
Axis
Bank introduced ‘Privee Infinite’, a credit card for its high net
worth customers, in November, 2010.
Almost
a year later, HDFC
Bank, the largest credit card issuer in the country, launched
‘Infinia’, a by-invitation-only credit card, with no spending
limits.
It positioned Infinia as a direct competition to Amex’s high-end
cards and strengthened its portfolio further with follow-up launches
— Regalia, Superia and Platinum Edge. “We want to offer our
customers all possible banking products. This strategy prompted us to
launch Infinia and other premium cards. The HNI (high networth
individual) is an important and growing business segment. Their
numbers may be small but they generally spend more,” said Parag
Rao, senior executive vice-president and head of credit cards at HDFC
Bank. According
to rough estimates by bankers, wealthy individuals account for 25 per
cent of the total cardholders in the country but their share in total
spends is estimated at 65-70 per cent.
Recently
ICICI Bank has launched Diamant, a super premium card for private
banking customers. The bank had also launched a couple of premium
cards, Sapphiro and Rubyx, earlier this year. “Our
strategy is to deepen the relationship with clients and expand the
product offering to meet the financial needs of customers. There are
different ways of getting a client into the bank’s family. This
(super-premium cards) is certainly one of them. Delinquency is hardly
there. The average spend is also three-four times more than mass
segment cards,” said Rajiv
Sabharwal,
executive director and head of retail banking at ICICI Bank.
Even
IndusInd Bank that entered the credit card market only in 2011, by
acquiring Deutsche Bank’s portfolio, is likely to introduce an
ultra-premium credit card soon, a top official of the bank said.
Bankers
agree Indian lenders have made a delayed entry into this space. A
limited client pool, lower returns and the affluent Indians’
preference for global brands made them hesitant.
“The
HNI segment is a relatively small but growing segment in India.
Customers in this segment are defined by the banking relationships
they share with us. Typically, such clients will not only be a credit
card customer but will have two to three different banking
relationships with us. All these factors have made this segment very
attractive for banks in India,” saidMuge
Yuzuak,
managing director and head of payment products at Citibank in India.
Bankers also felt HNIs are no longer “excessively brand conscious”
and choose their cards based on reward programmes and convenience.
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