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Customer satisfaction and acceptability of icici credit cards

CHAPTER I

INTRODUCTION

Institute of management in kerala,Senate Campus,Tvpm 1

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1.1 EXECUTIVE SYNOPSIS

The Research study deals with the marketing of ICICI credit cards among

various segments of customers and to find out the customer satisfaction and its

acceptability and the needs and expectations of the market. The particular study is

done at Duke Front line Financial Services Private Limited. The Front lines was

started a decade ago and are into the business of marketing financial products of

major banks.

A Credit Card is a mode of cash-less transaction that allows the user to pay for

goods or services with the actual payment being made in installments, over a period

of time. Most of the credit cards in the market belong to either MasterCard or Visa.For principal services to the industry they are typically paid 0.025% of the transaction

by the issuing bank:

This Research study is based on primary data that was obtained by

interviewing the various segments of credit card holders with the help of

questionnaires. It aims at evaluating the acceptability of ICICI credit cards in the

market and what additional services the company should adopt in order to make it

more acceptable

The sample comprised of 100 ICICI credit card holders from various segments

including the Very Rich, Consuming Class and Climbers

The general perception among credit card holders about the services rendered

by the bank was positive and the card is well accepted by the Clients

My conclusion is that the ICICI credit card is widely accepted among the

clients because of the wide range of services and conveniences they offer and the

Brand image of the bank. The bank could enhance its acceptability and make it as the

first choice for customers by offering some value added services and providing

information updates and enough facilities to use its full potential.


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1.2 RESEARCH DESIGN OF THE STUDY

1. NATURE OF DATA

The study is intended to find out the customer satisfaction and acceptability of

ICICI credit cards among the customers of Duke Frontline financial services

private limited. The study is based on the information gained by collecting data

through questionnaire and personal interview.

2. OBJECTIVES OF THE STUDY

1. To find out the customer satisfaction of ICICI credit cards

2. To find out the acceptability of ICICI Credit Cards among the customers3. To identify the needs and expectations of the credit card customers

4. To suggest improvements to make the Credit card more acceptable.

5. To find out the general trends in the credit card market

3. SCOPE OF THE STUDY

The project has a scope for identifying the needs and expectations of the customer

and based on that effecting improvements in order to make it widely acceptable.

4. SAMPLE SIZE

Sample for the study was ICICI credit card holders from various target segments

including Very Rich, Consuming Class and Climbers. The sample size used was

100 and all of them were the clients of Frontline.

5. SOURCES OF DATA

Both primary and secondary data were used. Questionnaires and interviewing were

used for collecting the primary data. Secondary data was collected from published

material and Internet

6. TOOLS USED FOR DATA COLLECTION:

The date was collected by way of questionnaires and interview of the sample. The

sample questionnaire is given in the Annexure.


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7. METHODOLOGY

Type of research : Descriptive.

Tool : Structured questionnaire. Data Collection : Interview with the help of questionnaires.

Method of analysis : Logical

8. LIMITATIONS OF THE STUDY

The respondents to the questionnaire were restricted to the customers of Duke

Frontline financial services private limited only. Was forced to take up a samplesize of 100 and I wasnt able spend more time with the respondents as they were

busy and were not ready to spend more time for my study.


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CHAPTER II

COMPANY PROFILE


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2.1 COMPANY PROFILE

ICICI Bank is India's second-largest bank with total assets of Rs. 3,446.58 billion

(US$ 79 billion) at March 31, 2007 and profit after tax of Rs. 31.10 billion for fiscal

2007. ICICI Bank is the most valuable bank in India in terms of market capitalization

and is ranked third amongst all the companies listed on the Indian stock exchanges in

terms of free float market capitalisation*. The Bank has a network of about 950

branches and 3,300 ATMs in India and presence in 17 countries. ICICI Bank offers a

wide range of banking products and financial services to corporate and retail

customers through a variety of delivery channels and through its specialised

subsidiaries and affiliates in the areas of investment banking, life and non-life

insurance, venture capital and asset management. The Bank currently has subsidiaries

in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong

Kong, Sri Lanka and Dubai International Finance Centre and representative offices in

the United States, United Arab Emirates, China, South Africa, Bangladesh, Thailand,

Malaysia and Indonesia. Our UK subsidiary has established a branch in Belgium.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the

National Stock Exchange of India Limited and its American Depositary Receipts(ADRs) are listed on the New York Stock Exchange (NYSE).

2.2 HISTORY OF ICICI

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank

was reduced to 46% through a public offering of shares in India in fiscal 1998, an

equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's

acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001,

and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal

2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government

of India and representatives of Indian industry. The principal objective was to create a

development financial institution for providing medium-term and long-term project

financing to Indian businesses. In the 1990s, ICICI transformed its business from a

development financial institution offering only project finance to a diversified

financial services group offering a wide variety of products and services, both directly


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and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI

become the first Indian company and the first bank or financial institution from non-

Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards

universal banking, the managements of ICICI and ICICI Bank formed the view that

the merger of ICICI with ICICI Bank would be the optimal strategic alternative for

both entities, and would create the optimal legal structure for the ICICI group's

universal banking strategy. The merger would enhance value for ICICI shareholders

through the merged entity's access to low-cost deposits, greater opportunities for

earning fee-based income and the ability to participate in the payments system and

provide transaction-banking services. The merger would enhance value for ICICI

Bank shareholders through a large capital base and scale of operations, seamless

access to ICICI's strong corporate relationships built up over five decades, entry into

new business segments, higher market share in various business segments,

particularly fee-based services, and access to the vast talent pool of ICICI and its

subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries,

ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with

ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in

January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the

High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.

Consequent to the merger, the ICICI group's financing and banking operations, both

wholesale and retail, have been integrated in a single entity.

1955 : The Industrial Credit and Investment Corporation of India Limited (ICICI)

incorporated at the initiative of the World Bank, the Government of India and

representatives of Indian industry, with the objective of creating a development

financial institution for providing medium-term and long-term project financing to

Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI

Limited


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ICICI emerges as the major source of foreign currency loans to Indian industry.

Besides funding from the World Bank and other multi-lateral agencies, ICICI also

among the first Indian companies to raise funds from International markets.

1956 : ICICI declared its first Dividend at 3.5%.

1958 : Mr.G.L.Mehta was appointed the 2nd Chairman of ICICI Ltd.

1960 : ICICI building at 163, Backbay Reclamation was inaugurated.

1961 : The first West German loan of DM 5 million from Kredianstalt was obtained

by ICICI.

1967 : ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed.

1969 : First two regional offices in Calcutta and Madras were opened

1972 : Second entity in India to set-up merchant banking services.

Mr. H. T. Parekh appointed as the third Chairman of ICICI.

1977 : ICICI sponsors the formation of Housing Development Finance Corporation.

Managed its first equity public issue

1978 : Mr. James Raj appointed as the fourth Chairman of ICICI.

1979 : Mr.Siddharth Mehta appointed as the fifth Chairman of ICICI.

1982 : Becomes the first ever Indian borrower to raise European Currency Units.

ICICI commences leasing business.

1984 : Mr. S. Nadkarni appointed as the sixth Chairman of ICICI.

1985 : Mr.N.Vaghul appointed as the seventh Chairman and Managing Director of

ICICI.

1986 : ICICI first Indian Institution to receive ADB Loans. First public issue by an

Indian entity in the Swiss Capital Markets.

:ICICI along with UTI sets up Credit Rating Information Services of India

Limited, (CRISIL) India's first professional credit rating agency.

:ICICI promotes Shipping Credit and Investment Company of India Limited.

(SCICI)

:The Corporation made a public issue of Swiss Franc 75 million in Switzerland,

the first public issue by any Indian equity in the Swiss Capital Market.

1987 : ICICI signed a loan agreement for Sterling Pound 10 million with

Commonwealth Development Corporation (CDC), the first loan by CDC for

financing projects in India

1988 : ICICI promotes TDICI - India's first venture capital company.


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1993 : ICICI sets-up ICICI Securities and Finance Company Limited in joint venture

with J. P. Morgan.

ICICI sets up ICICI Asset Management Company.

1994 : ICICI sets up ICICI Bank.

1996 : ICICI becomes the first company in the Indian financial sector to raise GDR.

ICICI announces merger with SCICI.

Mr.K.V.Kamath appointed the Managing Director and CEO of ICICI Ltd

1997 : ICICI was the first intermediary to move away from single prime rate to three-

tier prime rates structure and introduced yield-curve based pricing.

: The name "The Industrial Credit and Investment

: Corporation of India Limited " was changed to "ICICI Limited".

: ICICI announces takeover of ITC Classic Finance.

1998 : Introduced the new logo symbolizing a common corporate identity for the

ICICI Group.

:ICICI announces takeover of Anagram Finance.

1999 : ICICI launches retail finance - car loans, house loans and loans for consumer

durables.

:ICICI becomes the first Indian Company to list on the NYSE through an issue

of American Depositary Shares.

2000 : ICICI Bank becomes the first commercial bank from India to list its stock on

NYSE.

:ICICI Bank announces merger with Bank of Madura.

2001 : The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with

ICICI Bank.

2002 : Moodys' assign higher than sovereign rating to ICICI

: Merger of ICICI Limited, ICICI Capital Sercvices Ltd and ICICI Personal

Financial Services Limited with ICICI Bank


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CHAPTER III

PRODUCT PROFILE


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3.1 CARDS

ICICI Bank offers a variety of cards to suit your different transactional needs. Our range

includes Credit Cards, Debit Cards and Prepaid cards. These cards offer you convenience for

your financial transactions like cash withdrawal, shopping and travel. These cards are widely

accepted both in India and abroad.

Credit Card

Debit Cards

Travel Card

Prepaid Cards

Purchase Card

Distribution Cards

Business Card

ICICI Bank Credit Cards give you the facility of cash, convenience and a

range of benefits, anywhere in the world. These benefits range from life time free cards,

Insurance benefits, global emergency assistance service, discounts, utility payments, travel

discounts and much more.

The ICICI Bank Debit Card is a revolutionary form of cash that allows

customers to access their bank account around the clock, around the world. The ICICI Bank

Debit Card can be used for shopping at more than 3.5 Lakh merchants in India and 24 million

merchants worldwide.

Presenting ICICI Bank Travel Card. The Hassle Free way to Travel the

world. Traveling with US Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security

and convenience; take ICICI Bank Travel Card. Issued in duplicate. Offers the Pin based

security. Has the convenience of usage of Credit or Debit card.

http://www.icicibank.com/pfsuser/cards/creditcard/cc_home.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/pfsuser/cards/travel_card/index.htmhttp://www.icicibank.com/Pfsuser/cards/purchase_card/purchase_card.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/cards/com_card/bus_card/bus_card.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/pfsuser/cards/travel_card/index.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_home.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_home.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/pfsuser/cards/travel_card/index.htmhttp://www.icicibank.com/Pfsuser/cards/purchase_card/purchase_card.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/cards/com_card/bus_card/bus_card.htm

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ICICI Bank brings to you a complete bouquet of pre-paid cards providing

payment solutions at your fingertips. ICICI Bank pre-paid cards are a safe & convenient way

for associate payments, disbursements, gifting & small ticket transactions. Pre-paid cards are

available on a VISA platform thus providing accessibility to over 3.5 Lakh merchant

establishments & cash withdrawal from all VISA ATMs in India.

Introduction

A Credit Card is a mode of cash-less transaction that allows the user to pay for goods

or services with the actual payment being made in installments, over a period of time.

Most of the credit cards in the market belong to either MasterCard or Visa. For

principal services to the industry they are typically paid 0.025% of the transaction by

the issuing bank:

http://www.icicibank.com/Pfsuser/cards/prepaidcards/prepaid.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_pickacard3.htm#vmchttp://www.icicibank.com/pfsuser/cards/creditcard/cc_prefered.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_emicard.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_powerfulbenifits.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/HTML/Index.htmlhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_pickacard5d.htm#achttp://www.icicibank.com/pfsuser/cards/creditcard/cc_pickacard2.htm#cchttp://www.icicibank.com/pfsuser/cards/creditcard/cc_pickacard4c.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_pickacard1.htm#pchttp://www.icicibank.com/Pfsuser/cards/prepaidcards/prepaid.htm

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3.2 CREDIT CARD WITH INTERNET ACCESS TO ALL CUSTOMERS

ICICI Bank, the banking subsidiary of ICICI Ltd. (NYSE: IC and ICD) launched

India's first Credit Card with Internet access to all customers. The launch adds another

first to ICICI Group's Internet and e-commerce initiatives. ICICI Bank has pioneered

Internet Banking in the country. Recently, ICICI announced the launching of India's

first Internet stock trading service on www.icicidirect.com/

The launch marks the foray of ICICI Bank into credit cards. ICICI Bank's credit card

holders would have the convenience of accessing credit card information including

the facility to view, print statements, obtain details about their payments, outstanding

amount and due date, request a duplicate PIN mailer, send instructions, apply for new

cards as well as add-on cards, on the Internet. ICICI Group as a part of its "Click and

Brick" strategy has been developing multiple access channels including the Internet,

Call Centre and VISA affiliated ATMs. It may be recalled that ICICI Bank has had a

staggering 500% increase in Internet customers from 4,000 as on March 31, 1999 to

24,000 as on December 31, 1999.

Another major first in India would be the flexibility to the customer to choose a sub-

limit for add-on cards, enabling the customer to specify different individual credit

limits at both the primary as well as individual add-on card levels. These limits will

work as monthly limits, which would get refreshed at monthly billing cycles. This

therefore will allow parents to give add-on cards to their children (18 and above) and

yet restrict their spending to desired levels. The limits can also be changed at monthly

intervals thus offering true flexibility to customers. This powerful feature is expected

to eliminate the worry of over spending.

The array of products include:

True Blue : Positioned as an entry level offering, the 'True Blue' card is a value for

money card. Targeted at the general segment the card is available at an application fee

of Rs. 150 and an annual fee of Rs. 300.

Sterling Silver : A complete family offering from ICICI Bank with a free Add-on

Bandhan card along-with comprehensive insurance benefits for both primary as well

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as supplementary card members. Targeted at the upwardly mobile the card is

available at an application fee of Rs. 150 and an annual fee of Rs. 600.

Solid Gold : The International Card with additional comprehensive travel insurance,

as well as a Global One Calling Card and a very attractive balance transfer facility.

The Solid Gold card is being offered at a special invitation price comprising an

application fee of Rs. 300 and an annual fee of Rs. 1200.

The Sterling Silver and Solid Gold cards will also offer a balance transfer facility with

a 1.75% Monthly Percentage Rate (MPR) on Sterling Silver and 1.5% MPR on Solid

Gold respectively, for the first six months.

A tie-up with VISA has ensured that the domestic cards will immediately have

acceptance at over 100,000 outlets in India and the international cards will, in

addition, have acceptance at over 18 million merchants and 530,000 ATMs

worldwide. The Bank has also set up a 24 hour Call Centre to handle customer queries

and built in cash advance facilities at all VISA affiliated ATMs. The Bank has a wide

network of branches at 40 centres in India.

ICICI Bank uses Vision Plus, the reputed credit card software from PaySys, USA and

Infinity, the Internet Banking software from Infosys. A key feature of Vision Plus is

its comprehensive functionality which allows processing starting from application

capture, decisions, account management, delinquency and collection handling as well

as customer service.

According to Shikha Sharma - Senior General Manager, ICICI, - "The entire project

has been executed in record time, with significant investments in hardware and an

internationally proven software. We decided to create our own infrastructure for back-

office processing in order to ensure delivery of quality service to customers, as also

quick innovation and shorter time to market for new products developed in response

to changing customer needs."

"VISA is proud to partner with ICICI Bank for the launch of the entire range of credit

cards in India. Globally, Visa plays a pivotal role in advancing new payment products

and technologies and was therefore a natural choice for a technology-oriented


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institution like ICICI. The ICICI Bank cards offer several value-added and web-

enabled features that leverage the power of the world's largest payment system and

one of India's premier financial institutions," said James G. Murray, Executive Vice

President, South East Asia & Greater China, VISA International.

3.3 CREDIT CARD HOLDER BEHAVIOR

According to Visa Internationals latest data, average Indian cardholder uses his card

9.3 times, spending about Rs. 14,700 per year. A number of card owners do not use

their cards and almost 20 30 % cards are inactive (less than one usage every

quarter).

An important fact that should be observed is that it is only in the past few years that

the Indian customer is beginning to accept Credit. The Indian culture doesnt

promote credit, and it is this outlook change which is the most important development

for the credit card industry. ABN Amro, for instance, backed up their launch of the

Freedom Card with research that showed that the Indian middle class views the

credit card as a potential debt trap.


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3.4 TARGET MARKET

a) Customer Segments:

The segmentation of the card industry can be done on the basis of income.

The Indian market reflects considerable diversities in income levels and lifestyles. A

World Bank estimate places average annual household incomes (in terms of

purchasing power) at US $6452. But there are large segments of people, whose

income levels are significantly higher, growing faster and spurring a consumer

revolution. It is difficult to obtain correct estimates of this group, as there is a very

small percentage of Indias rich who pay income tax and their income levels are

correctly reported. Therefore to conduct this segmentation, we shall have to make use

of National Council of Applied Economic Research (NCAER) data and not the

estimates from the income tax department.

The segment which have been identified are as follows:

Segments Income Group (Rs.)

Very Rich 2,15,000+

Consuming Class 45,0002,15,000

Climbers 22,00045,000

Aspirants 16,00022,000

Destitute

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Segments with high unrealized potential

Mid-Size cities in India have low credit card penetration. The residents of such cities

are affluent and they are good markets for ICICI cards. This low penetration is due to

comparatively low acceptance of credit cards.

Rich farmers who live in the rural belt but also spend quite some time in the nearby

towns can be tapped. A product can be introduced to serve their specialized needs.

The growing number of netizens represents a segment with high-unrealized

potential.

Customers Motivations

Segments Motivations

Very Rich Convenience and acceptability, Level of service, Credit Limit

Consuming Class Prestige, Convenience and acceptability, Level of service, Charges

Climbers Prestige,Charges

Charges include all commissions, interest rate, annual fees, which are to be paid to

the bank. The motivational factor has been derived from the credit card holder

behavior and income levels. This shows differentiation as we move along the various

segments. Fee charges are not at all important for the Very Rich but they assume a

fair degree of importance as we move down the segments. In case of Climbers,

Level of service has very little motivation to offer. This segment primarily has either

the non-premium cards or cards issued by the nationalized banks. In both the

scenarios, level of service is not very high. The other segments have not been

considered since they do not fall into the potential customer category. However, with

the introduction of Kisan Cards (The major issuing banks are: Dena Bank, Punjab

National Bank, State Bank of India Benegal Circle, State Bank of Indore, Vijaya

Bank), these segments are also being brought into purview of credit card users

(assumption: 65% of low-income households are associated with agriculture


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The Indian Middle class

India has registered a very impressive growth of its middle class -- a class

which was virtually non-existent in 1947 when India became a politically sovereign

nation.

At the start of 1999, the size of the middle class was unofficially estimated at

300 million people.

The middle class comprises three sub-classes: the upper middle, middle

middle and lower middle.

The upper middle class comprises an estimated 40 million people. They have

annual incomes of US$600,000 each in terms of Purchasing Power Parity (PPP).

The middle middle class comprises an estimated 150 million people, each

with PPP incomes of US$20,000 per year each.

The lower middle class comprises an estimated 110 million people. An

estimate of their annual income is not available, but they are mostly the relatively

affluent people in the rural areas of India.

The middle classes ON THE WHOLE (i.e. upper middle + middle middle +

lower middle classes) is expected to grow by 5 to 10 percent annually.

3.5 Characteristics of the Indian Credit cardMarket

The credit card market in India is about 3 million with a value turnover of around

Rs.2500 crores. The market is expected to grow by 30% p.a. This would still be a very

low penetration of a potential market of 60 million cardholders. The credit card

business is a low-margin, high volume business.

Thus, given the low income per card and the high initial investments by the bank,

large volumes in terms of cards issued and the transactions financed are required to

make the operations profitable.

India's consuming class


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Table IEstimated households by annual

income

Table IIStructure of the Indian consumer market (1995-96)

Annual income (inRupees) at 1994-

95 prices

No. ofhouseholds(in million)

Annualincome

(in Rupees)at 1994-95

prices

Classification

Number of households (inmillion)

Urban Rural Total

215,000 The rich 0.8 0.4 1.2

Total no. of households:164.9 million Total no. of households 46.6 118.2 164.8

Source: National Council of Applied Economic Research (NCAER). The abovepresentation has been slightly modified by IndiaOneStop.Com

India has now become the third biggest card market for Visa International in Asia

Pacific after Japan and Korea. But the country has a long way to go in terms of card

spend, where it lags behind a number of countries in the region.

Visa is supposed to be the market leader in both credit and debit cards in India. As on

March 31, 06, Visa saw a 36% growth in the number of cards issued. The current

number of debit and credit cards stand at 27m and 12m respectively. The total number

of debit and credit cards issued in India as on the period is estimated to be at around

47m and 18m respectively.

According to Santanu Mukherjee, country manager (South Asia), India is now the

third largest market in Asia Pacific after Japan at 85m cards and Korea at 50m cards.

The total numbers of credit cards issued in India have gone up by 38%, while that for

debit cards rose 35%.

India is among the fastest growing markets for Visa International in the region. China,

Pakistan and Vietnam are the other markets which are growing fast. Mr Mukherjee

said there are around 140m bankable customers in India. More debit cards are being

issued as public sector banks are going in for core banking solutions. Banks have

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started issuing credit cards in Tier II cities and avenues like airline ticketing are

opening up.

Even as card growth has seen a sharp spurt, retail sales volumes (RSVs) - spends by

customers in point of sales (PoS) terminals - are also growing. Visa saw a 61%

growth in RSVs to $5.37bn as on March 31, 06. According to Mr Mukherjee, the

annual spends by customers on credit cards have increased to $380 from $335 the

previous year. RSVs were at $900m in March 31, 02.

However, RSVs in India is comparatively lower than other countries in the region.

For instance, RSVs in Korea for Visa is at $129bn, Japan $103bn, Australia $75bn,

Taiwan $25bn, Hong Kong $20bn, New Zealand $9.4bn, Thailand $7.6bn and

Singapore at $5.89bn.

Says Mr Mukherjee, Debit cards are still being largely used as ATM cards. The

overall consumer awareness is low. Also, acceptance of PoS terminals is not as

prevalent as other markets. For instance, Korea has around a couple of million

terminals. Debit card RSVs in India are now at about 18-19% this year as against

about 15-16% last year.

However, over the past few years, the number of PoS terminals in India have seen a

significant growth. According to him, PoS terminals in India as on March 31, 06 was

at 3,06,000 as compared to 40,000 terminals in March 31, 02. Visa card sales

volumes, which includes RSVs and ATM transactions, have seen a 47% rise to

$432bn as on March 31, 06.


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3.6 LITERATURE ON CREDIT CARDS

Credit card usage in India still low: Survey

The Indian credit cards industry is still in a relatively nascent stage when compared to

economies in West Asia, a survey by MasterCard International has found.

According to the survey results, only 14 per cent of Indians currently own a credit

card. This is in sharp contrast to countries such as the United Arab Emirates and

Kuwait where 63 per cent and 50 per cent of respondents, respectively, own a credit

card. The results indicate the high growth potential for the payment card industry in

India, the survey says.

It further finds that 73 per cent of Indians spend less than $35 on an average each

month, while 25 per cent spend between $35 and $300. Only two per cent of Indians

spend over $300 on their credit cards during a month. On the other hand, only six per

cent of cardholders in the UAE have an average monthly spend below $35, whilst 58

per cent of cardholders in the UAE have an average monthly spend of over $300,

MasterCard International's Consumer Lifestyle survey in the South Asia, Middle East

and Africa Region (SAMEA) found.

The usage of credit cards by Indians is also much lower than their Asian counterparts.

Seventy-two per cent of Indians use their credit cards 1-2 times (or less) a month,

while 23 per cent of Indians use their cards between 3-5 times and the remaining 5 per

cent use cards 6 times or more every month. In the UAE, 31 per cent of cardholders

use their cards more than 10 times during a month, while only 15 per cent use their

cards 1-2 times (or less).

Meanwhile in India, 44 per cent of cardholders use their credit cards most often for

purchase of clothing, 14 per cent for supermarket/grocery shopping, 9 per cent at

hotels and 6 per cent at restaurants. In the other six countries surveyed, the majority of

cardholders use their card most often for supermarket/grocery shopping.

In terms of the single most important factor influencing choice of credit card, 30 per

cent of Indians say they are influenced by the credit card brand, closely followed by


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23 per cent who choose a credit card depending on the credit limit. Interestingly, 8 per

cent of cardholders say they are influenced by the card design, while only 5 per cent

and 2 per cent cardholders say they are influenced by the interest rate and the bank

staff recommendations respectively.

ICICI Bank, Sarovar Hotels' co-branded card

Mumbai Feb 20 ICICI Bank has tied up with Sarovar Hotels to launch a co-branded

credit card. Customers can use the card to get 30 per cent discount on room tariffs at

select Sarovar hotels and 15 per cent discount at Sarovar restaurants.

The bank has around 7 million credit card customers and enjoys a market share of

around 35 per cent.

Sarovar Hotels has around 36 hotels across the country and 20 properties under

development.

Chennai April 3 In the coming months, ICICI Bank will strive to establish a

connection in the minds of its customers between using their debit cards and saving

the planet.

Today, most people use debit cards to draw money from ATMs and spend the money

at shops and restaurants. ICICI Bank wants its customers to use debit cards

straightaway in shops and restaurants and thereby minimise the use of paper currency.

Less paper use is more environment-friendly.

The Reserve Bank of India's figures say that in 1935, India had 100 million pieces of

currency notes in circulation. As at the end of March 2005, the notes in circulation

were 36,985 million or, about 370 times more.

"Imagine how much of energy, how much ink would be consumed in making the

paper," says Dr Nachiket Mor, Deputy Managing Director, ICICI Bank.

The war against currency notes is one of the two steps envisaged under the bank's

recent `Go green India' initiative, the other one being to coax customers to go online,in order to reduce paper-based transactions.


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The initiative itself is a small step towards aligning all the bank's activities to

environment sustainability, Dr Mor told Business Line. The bank's top brass is

mulling bringing in what it calls `environmentally sustainable project finance' or

ESPF guidelines.

Dr Mor pointed out that there were two broad approaches to the issue. First, to frame

rules do's and don'ts to ensure environmental protection on the basis of which

project finance will be made.

The second approach is to take a stand as `do whatever you want, but it will cost you

to go against environment protection'.

Plastic Money: the Currency of Modern India.

Indian consumers have never had it so good. The soiled notes are definitely out.

Plastic money is in! Carrying cash is no more `a pain in the neck' as consumers are

relying more on the `plastic card' which gives them money on credit.

Credit Cards have finally arrived in India. The card industry which is growing at the

rate of 20% per annum is flooded with cards ranging from gold, silver, global, smart

to secure.the list is endless. From just two players in early 80s, the industry now

houses over 10 major players vying for a major chunk of the card pie.

Currently four major bishops are ruling the card empire---Citibank, Standard

Chartered Bank, HSBC and State Bank of India (SBI). The industry, which is catering

to over 3.8 million card users, is expected to double by the fiscal 2003. According to a

study conducted by State Bank of India, Citibank is the dominant player, having

issued 1.5 million cards so far. Stanchart follows way behind with 0.67 million, while

Hongkong Bank has 0.3 million credit card customers. Among the nationalized banks,

SBI tops the list with 0.28 million cards, followed by Bank of Baroda at 0.22 million.

The credit card market in India, which started out in 1981, is on the verge of an

unprecedented boom. Between 1987 and 2000, the market has virtually grown to over

3.8 million cards with almost 25-30 % growth in new cardholders.


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SBI, one of the late entrants in the card market, has managed to grab over 8 per cent

of the market share from the bigwigs like Citibank and Standard Chartered Bank. The

bank's credit card business has grown by 8 per cent over the last two years. According

to bank officials, SBI's card issue so far is to the tune of 0.28 million which is

expected to cross the 1 million mark by the fiscal 2002. The bank is also planning to

launch debit card, global card, gold card and corporate card shortly.

In a bid to tap the lower middle class segment, SBI is currently sharpening its

marketing skills for the launch of `secure card', aimed at its fixed deposit clients. The

bank will be launching this new product at five of its branches at Delhi, the country's

capital within a fortnight. With the launch of `secure card', SBI will become the first

bank to tap the lower middle class segment. By the end of the fiscal 2000, the bank is

expected to take the secure card to over 36 centers throughout the country.

The bank is putting its best foot forward to compete with global card majors like

Citibank and Standard Chartered Bank. The global bigwigs have already established

themselves as the `bankable brands' in the metros. However, in a bid to move to

greener pastures, they are trying to tap the co-branded card market which has vast

potential for growth. Citibank, which is leading the card empire recently launched a

co-branded credit card in partnership with Indian Oil Corporation. The card will offer

its members reward points on every international spend which can be redeemed for

free fuel in India.

Expanding the Card Pie

There may be 3.8 million cards today. But the catch is that there are not 3.8 million

cardholders - one person has multiple cards. This makes the job of selling cards all themore difficult since everybody is targeting the same market segment. What's more,

multiple card ownership ends up splitting card spends.

Only banks, which penetrate the Indian countryside, will be able to stand the test of

the time. For present, consumer is definitely the king!


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CHAPTER IV

DATA ANALYSIS AND INTERPRETATION


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1. Where do you got information about ICICI credit card ?

Table 1: Table showing the source of information regarding credit cards

Variable Rating Percentage

Bank 52 52

Advertisement 8 8

Telemarketing 30 30

Friends 10 10

Others 0 0

Interpretation

About 52% of the respondents got the information regarding credit cards from

the bank and 30% where of the opinion that they got the information from

Telemarketing, 8% from Advertisements and 10% through friends


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Figure 1: Figure showing the source of information regarding credit cards

Bank, 52%

Advertiseme

nt, 8%

Telemarketing, 30%

Friends, 10% Others, 0%

Bank Advertisement Telemarketing Friends Others


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2. Do you think that the income limit fixed for issue of credit cards is apt?

Table2: Table showing the opinion of respondents regarding Income limit for issue

of credit cards


Strongly Agree 22 22

Agree 48 48

Neutral 10 10

Disagree 13 13

Strongly Disagree 7 7

Interpretation

About 22% of the respondents Strongly agree that the income limit fixed for

issue of credit cards from the bank is apt and 48% where of the opinion that they

Agree with it,10% doesnt have any opinion 13% Disagreed and 7% Strongly

disagreed regarding the income limit fixed for issue of credit cards


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Figure 2: Figure showing the opinion of respondents regarding Income limit for issue

of credit cards

S A, 22%

A, 48%

N, 10%

D, 13%S D, 7%

S A A N D S D


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3. Do you think that the formalities for issuing credit cards is OK

Table 3: Table showing the opinion of respondents regarding the formalities needed

for credit card issue



Agree 30 30

Neutral 5 5

Disagree 20 20


Interpretation

35% of the respondents strongly agreed that the formalities for issue of credit card is

OK 30% Agreed ,5% remained neutral 20% Disagreed and 10 % Strongly Disagreed

to the statement


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Figure 3: Figure showing the opinion of respondents regarding the formalities needed

for credit card issue

S A, 35%

A, 30%

N, 5%

D, 20%

S D, 10%

S A A N D S D


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4. Does the credit card made your interaction with the bank easy?

Table 4: Table showing the opinion of respondents that credit card made interaction

with the bank easy



Agree 57 57

Neutral 0 0

Disagree 6 6


Interpretation

About 33% of the respondents Strongly agree that credit card made interaction

with the bank easy and 57% where of the opinion that they Agree with it, 6%

Disagreed and 4% Strongly disagreed


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Figure 4: Figure showing the opinion of respondents that credit card made interaction

with the bank easy

S A, 33%

A, 57%

N, 0%

D, 6%

S D, 4%

S A A N D S D


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5. Does the bank provide information regarding accessing credit card information

through internet?

Table 5: Table showing the opinion of respondents that the bank provides information

regarding accessing credit card information through internet



Agree 38 38

Neutral 5 5

Disagree 21 21


Interpretation

About 27% of the respondents Strongly agree that the bank provides information

regarding accessing credit card information through internet and 38% where of the

opinion that they Agree with it, 5 % doesnt have any opinion 21% Disagreed and 9%

Strongly disagreed to the statement


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Figure 5: Figure showing the opinion of respondents that the bank provides

information regarding accessing credit card information through internet

S A, 27%

A, 38%

N, 5%

D, 21%

S D, 9%

S A A N D S D


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6. Are you aware of the fact that you can fix your own credit limit?

Table 6: Table showing the opinion of respondents that they have the flexibility to

fix their credit limit



Agree 58 58

Neutral 0 0

Disagree 8 8


Interpretation

About 32% of the respondents Strongly agree that the bank provides information

regarding accessing credit card information through internet and 58% where of the

opinion that they Agree with it, 8% Disagreed and 2% Strongly disagreed to the

statement


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Figure 6: Figure showing the opinion of respondents that they have the flexibility to

fix their credit limit

S A, 32%

A, 58%

N, 0%

D, 8%S D, 2%

S A A N D S D


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7. Are you able to utilize to the full advantage of the flexibility offered in fixing the

credit limit by self ie. Are you able to limit your spending as a result of this flexibility

Table 7: Table showing the opinion of respondents that they are able to limit the

spending as a result of the flexibility offered in fixing their own credit limit



Agree 52 52

Neutral 5 5

Disagree 10 10


Interpretation

About 28% of the respondents Strongly agree that they are able to limit the spending

as a result of the flexibility offered in fixing their own credit limit and 52% where of

the opinion that they Agree with it, 5% were neutral 10% Disagreed and 5% Strongly

disagreed to the statement


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Figure 7: Figure showing the opinion of respondents that they are able to limit the

spending as a result of the flexibility offered in fixing their own credit limit

S A, 28%

A, 52%

N, 5%

D, 10% S D, 5%

S A A N D S D


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8. Do you think that there is a need for a Card for Internet transactions?

Table 8: Table showing the opinion of respondents that they need a Card for Internet

transactions



Agree 30 30

Neutral 15 15

Disagree 22 22


Interpretation

About 15% of the respondents Strongly agree that they need a Card for Internet

transactions and 30% where of the opinion that they Agree with it, 15% were neutral

22% Disagreed and 18% Strongly disagreed to the statement


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Figure 8: Figure showing the opinion of respondents that they need a Card for

Internet transactions

S A

15%

A

30%N

15%

D

22%

S D

18%

S A A N D S D


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9. Are you of the opinion that the bank is charging high interest rates?

Table 9: Table showing the opinion of respondents that the bank is charging high

interest rates



Agree 39 39

Neutral 10 10

Disagree 23 23


Interpretation

About 18% of the respondents Strongly agree that the bank is charging high interest

rates and 39% where of the opinion that they Agree with it, 10% were neutral 23%

Disagreed and 10% Strongly disagreed to the statement


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Figure 9: Figure showing the opinion of respondents that the bank is charging high

interest rates

S A, 18%

A, 39%N, 10%

D, 23%

S D, 10%

S A A N D S D


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10. Do you think that the bank provides Premium benefits for use abroad?

Table 10: Table showing the opinion of respondents that the bank provides Premium

benefits for use abroad



Agree 28 28

Neutral 10 10

Disagree 34 34


Interpretation

About 12% of the respondents Strongly agree that the bank provides Premium

benefits for use abroad and 28% where of the opinion that they Agree with it, 10%

were neutral 34% Disagreed and 16% Strongly disagreed to the statement


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Figure 10: Figure showing the opinion of respondents that the bank provides Premium

benefits for use abroad

S A, 12%

A, 28%

N, 10%D, 34%

S D, 16%

S A A N D S D


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11. Do you find enough ATM counters for withdrawing money using the credit card

and use it up to its potential

Table 11: Table showing the opinion of respondents that there are enough ATM

counters for withdrawing money using the credit card



Agree 22 22

Neutral 8 8

Disagree 34 34


Interpretation

About 16% of the respondents Strongly agree that there are enough ATM counters for

withdrawing money using the credit card and 22% where of the opinion that they

Agree with it, 8% were neutral 34% Disagreed and 20% Strongly disagreed to the

statement


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Figure 11: Figure showing the opinion of respondents that there are enough ATM

counters for withdrawing money using the credit card

S A, 16%

A, 22%

N, 8%D, 34%

S D, 20%

S A A N D S D


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12. Are you able to use credit card for all your transactions?

Table 12: Table showing the opinion of respondents that they are able to use credit

card for all their transactions



Agree 40 40

Neutral 8 8

Disagree 14 14


Interpretation

About 26% of the respondents Strongly agree that they are able to use credit card for

all their transactions and 40% where of the opinion that they Agree with it, 8% were

neutral 14% Disagreed and 12% Strongly disagreed to the statement


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Figure 12: Figure showing the opinion of respondents that they are able to use credit

card for all their transactions

S A, 26%

A, 40%

N, 8%

D, 14%

S D, 12%

S A A N D S D


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13. Are you getting enough value added benefits and information updates from ICICI

Table 13: Table showing the opinion of respondents that they getting enough value

added benefits and information updates from ICICI



Agree 32 32

Neutral 10 10

Disagree 22 22


Interpretation

About 16% of the respondents Strongly agree that they getting enough value added

benefits and information updates from ICICI and 32% where of the opinion that they

Agree with it, 10% were neutral 22% Disagreed and 20% Strongly disagreed to the

statement


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Table 13: Table showing the opinion of respondents that they getting enough value

added benefits and information updates from ICICI

S A, 16%

A, 32%

N, 10%

D, 22%

S D, 20%

S A A N D S D

14. Do you think that ICICI credit cards are comparatively better?


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Table 14: Table showing that ICICI credit cards are comparatively better



Agree 45 45

Neutral 5 5

Disagree 15 15


Interpretation

About 24% of the respondents Strongly agree that ICICI credit cards are

comparatively better and 45% where of the opinion that they Agree with it, 5% were

neutral 15% Disagreed and 11% Strongly disagreed to the statement


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Figure14: Figure showing that ICICI credit cards are comparatively better


S A, 24%

A, 45%

N, 5%

D, 15%

S D, 11%

S A A N D S D

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15. Are you fully satisfied with the services of credit card ?

Table 15: Table showing the opinion of customers that they are fully satisfied with

ICICI cards



Agree 48 48

Neutral 5 5

Disagree 12 12


Interpretation

About 32% of the respondents Strongly agree that they fully satisfied with ICICI

cards and 48% where of the opinion that they Agree with it, 5% were neutral 12%

Disagreed and 3% Strongly disagreed to the statement


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Figure 15: Figure showing the opinion of customers that they are fully satisfied

with ICICI cards

S A

32%

A

48%

N

5%

D

12%

S D

3%

S A A N D S D


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CHAPTER V

FINDINGS CONCLUSION AND

SUGGESTIONS


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5.1 FINDINGS

1. Most of the customer got the information regarding credit cards from the bank and

through telemarketing, ie.52% of the respondents got the information regarding

credit cards from the bank and 30% where of the opinion that they got the

information from Telemarketing,

2.Most of therespondents agreed that the Income limit set for issue of credit cards is

apt. ie 22% Strongly agreed and 48% agreed with this

3. Most of therespondents agreed the formalities needed for credit card issue is OK.

35% of the respondents strongly agreed that the formalities for issue of credit card is

OK 30% Agreed

4. Most of therespondents agreed that credit card made interaction with the bank easy

ie 33% strongly agreed and 57 Agreed with this

5. Most of therespondents agreed the bank provide information regarding accessing

credit card information through internet

6. Most of the respondents agreed that they are aware of the fact that they can fix

your own credit limit

7. Most of therespondents agreed that they are able to limit the spending as a result

of the flexibility offered in fixing their own credit limit

8. Most of therespondents agreed that they need a Card for Internet transactions

9. Most of therespondents agreed that the bank is charging high interest rates

10. Most of therespondents agreed that the bank provides Premium benefits for use

abroad

11. Most of the respondents agreed that there are enough ATM counters for

withdrawing money using the credit card

12. Most of the respondents agreed that they are able to use credit card for all their

transactions


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13. Most of therespondents agreed that they getting enough value added benefits and

information updates from ICICI

14. Most of the respondents agreed that ICICI credit cards are comparatively better

About 24% strongly agreed and 45 % agreed with this

15. Most of therespondents agreed that they are fully satisfied with ICICI cards

5.2 CONCLUSION

The Research study dealt with the marketing of ICICI credit cards among various

segments of customers and to find out the customer satisfaction and its

acceptability and the needs and expectations of the market. The particularstudy is done at Duke Front line Financial Services Private Limited. The Front

lines was started a decade ago and are into the business of marketing financial

products of major banks.

By data analysis and its interpretation I was able to arrive at a general conclusion

regarding my study that the customers of ICICI Credit Cards are satisfied and the card

is widely accepted compared to other credit cards .Even though the clients of ICICI

are highly satisfied regarding the credit card and the allied services offered to themstill there are some more needs for the customers .I have put these unmet needs as my

suggestion towards the company.


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5.3 SUGGESTIONS

Unmet Needs

Unmet needs analysis in qualitative research has brought to light benefits which are

not currently being offered by the credit card industry and hence present an

opportunity.

Need for a Card customized for Internet transactions:

With rapid growth of business over the Internet, there now exists a great need for acard suitable for transacting safely and conveniently over the Internet. The growing

number of Internet users will provide a lucrative market for this product.

Need for Premium benefits:

Even though there are credit cards like Diners in the premium segment, there is a

dearth of premium benefits. Examples of these are Special airport Lounges etc.

These benefits are available to the Indian consumer once he goes abroad, but withinIndia, he doesnt get all the extra premium benefits which can associated with

Premium cards.

Proliferation of ATMs:

The credit card can be used for withdrawing cash from an ATM. This revolving credit

facility is also a major revenue earner for the issuing bank (interest charges range

from 1.99 % to 3 % per month). There are very few ATMs in the metros, and are not

there in most non-metro cities. The lack of the ATMs doesnt allow the credit card to

be used to its potential.

Wider Acceptability:

Though the numbers of Merchant Enterprises are on the increase, more ME should be

included in the credit card framework


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BIBLIOGRAPHY

Ramaswamy.V.S and Namakumari.S Marketing Management- Macmillan

business books-third edition

Kothari.C.R,Research Methodology - Vishwaprakasan Publishers

Michael Armstrong & Angela Baron- Performance management

Philip Kotler,Kevin Lane Keller Marketing management- prentice hall


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APPENDIX

CUSTOMER SATISFACTION OF ICICI CREDIT CARDS

QUESTIONNAIRE

Name :Position :

2. Where do you got information about ICICI credit card ?

Bank Advt Telemarketing

Friends Others

2. Do you think that the income limit fixed for issue of credit cards is apt?

Strongly Agree Agree Neutral

Disagree Strongly Disagree

3. Do you think that the formalities for issuing credit cards is OK



4. Does the credit card made your interaction with the bank easy?



5. Does the bank provide information regarding accessing credit card information

through internet?



6. Are you aware of the fact that you can fix your own credit limit?




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7. Are you able to utilize to the full advantage of the flexibility offered in fixing the credit

limit by self ie. Are you able to limit your spending as a result of this flexibility



8. Do you think that there is a need for a Card for Internet transactions?



9. Are you of the opinion that the bank is charging high interest rates?



10. Do you think that the bank provides Premium benefits for use abroad?



11. Do you find enough ATM counters for withdrawing money using the credit

card and use it up to its potential



12. Are you able to use credit card for all your transactions?



13. Are you getting enough value added benefits and information updates from

ICICI



14. Do you think that ICICI credit cards are comparatively better?



15. Are you fully satisfied with the services of credit card ?




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