Request for Credit Cards cross pre-Covid levels in October

Demand for new credit cards has fully recovered and monthly applications in October have exceeded levels in the same month of the previous year, writes The Times of India. According to credit information company TransUnion Cibil, last month saw inquiries that were 106% of the queries in October 2019. Most of the demand is coming from small towns and non-metros, with metros yet to register growth over the previous year. 
 
Each time a bank processes a credit card application, it raises a query with TU Cibil. These queries had dropped to 5% of the previous year’s level in April this year on account of the lockdown. A few months later in July, the numbers picked up but were still 61% of total inquiries in July 2019. 
 
According to RBI data, there were 5.9 crore credit cards outstanding as of September 2020, up from 5.8 crore in March. In April, the number of outstanding credit cards had dipped to 5.7 crore as they were not getting replaced because of the lockdown. The RBI data also shows that SBI Card issued 4.6 lakh cards in the first half of FY21, while in the private sector HDFC Bank and ICICI Bank issued 4.8 lakh and 1.6 lakh during the same period. 
 
Credit card origination volumes have also started picking up gradually as demand has resumed. Credit card origination volumes for July this year were at 37% of July 2019 levels. This decline is not as sharp as the one seen some months before amid the lockdown in April, where origination volumes slipped to 9% of April 2019 levels.
 

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder