E-banking picks up fast; cheques, credit cards passé
Jul 16 2009 , Mumbai
According to a data compiled by the Reserve Bank of India, the first two months of the financial year recorded Rs 55,202.69 crore worth of electronic transfers, a good 44 per cent higher than what was recorded in the same period last year.
However, the use of credit cards is steadily dwindling, with a total number of cards in the first two months coming down by 6.45 lakh. This trend is mainly due to banks becoming extra cautious in issuing new cards as delinquencies on their card portfolios increase.
“Banks are definitely pushing for transaction automation as it saves a lot of cost for banks. Customers are also getting more net savvy. They give banks standing instruction to debit money from their accounts. Due to the economic recession, banks across the board are cautious about issuing credit cards,” said Aspy Engineer, vice-president, alternate channels, Axis Bank.
The number of credit cards in 2008-09 fell to 2.46 crore, a sharp fall from 2.75 crore cards that were in circulation at the end of 2007-08. In FY09, the number of cards shrank from 2.83 crore to 2.46 crore at the year-end. But debit cards have increased from 10.5 crore in the beginning of 2008-09 to 14.3 crore cards in May-end.
Total electronic payments for the period was Rs 98,016.44 crore which includes electronic fund transfers, electronic clearing services and payments through debit and credit cards for the period — an increase of 28 per cent. Electronic clearing services, or a direct debit from one’s bank account, for utility bills like rose marginally to Rs 1,1599.92 crore from Rs 1,0139.17 crore during the same period last year.