Indian Credit Card Sector Plagued by Random Distribution and Bad Assets

By MAHUA VENKATESH, Financial Express

The level of bad assets in the credit card sector, currently touching 9%, is primarily due to the focus of the companies in increasing market share through arbitrary distribution of the product, according to the Credit Card Management Consultancy (CCMC). CCMC said that card issuers must re-orient their focus and concentrate on usage which is still very low in the country.

That apart, consumers often have multiple cards which leads to non usage of the product. “The card issuers must now devise ways to encourage customers to make their purchases using their cards. Unfortunately, most companies focus on expanding the overall credit card market, often with unsolicited cards as well,” Vijay Mehta, director, CCMC, said.

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