A
PROJECT REPORT
ON
STUDY OF CREDIT CARD IN INDIAN SCENARIO
Presented by
Mrs. Yogita Bhikan Patil
(PRN No: 201917000274701)
WITH SPECIALISATION IN FINANCE MANAGEMENT
Under the Guidance of
Prof. Pallavi Kulkarni (MBA-Finance)
Submitted to
Yashwantrao Chavan Maharashtra Open University (YCMOU),
Nashik – 422222
In partial fulfillment of the requirement for the award of the degree in
master of business administration
Through
All India Institute of Local Self Government
Pinnac Memories 2nd Phase ‘L’ Building Kothrud
Pune – 411038
2020-21
ACKNOWLEDGEMENT
I take this opportunity to place my sincere gratitude to Yashwantrao Chavan
Maharashtra Open University Nashik, for providing me with the wonderful
opportunity of making a project report. I wish to extend my gratitude to all the credit
cards users and supplyer banks for providing intellectual information at ease. This
project would not have been possible without their valuable inputs. I am grateful to
them for sparing their precious time in order to help me with the report. I would also
like to thank the entire hub of online resource providers who was kind enough to lend
with valuable inputs related to area of my interest and supported me to put the same in
this work.
I am also grateful to my guide Prof. Pallavi Kulkarni for her able guidance and
constant motivation, which was instrumental in the timely completion of the project.
Date - Patil Yogita Bhikan
Place -Pune (Research Student)
STUDENT’S DECLARATION
I hereby declare that this study Report entitled “Study Of Credit Card In Indian
Scenario” has been submitted by me is based on actual work carried out by me under
the guidance and supervision of Prof. Pallavi Kulkarni. Any reference to work done
by any other person or institution or any material obtained from other sources have
been duly cited and referenced. It is further to state that this work is not submitted
anywhere else for any examination.
Place: Pune Signature of the Student
Date:
CERTIFICATE FROM THE GUIDE
This is to certify that Mrs. Yogita Bhikan Patil has completed the Project
Report on “Study of Credit Card in Indian Scenario” under my guidance and
supervision, and submitted the Report according to the norms laid down by the
Yashwantrao Chavan Maharashtra Open University. The material that has been
obtained from other sources is duly acknowledged in the report. It is further
certified that the work or its part has not been submitted to any other University
for examination under my supervision. I consider this work worthy for the award
of the degree of Master of Business Administration.
Signature of the Guide
Place: Pune
Date:
INDEX
Sr. No Title of Page No.
Content
Acknowledgement I
Student’s Declaration II
Certificate from guide III
1 Introduction 1-7
5 Company Profile 8-12
6 Theoretical Background 13-28
7 Research Methodology 29-32
8 Data Analysis and Interpretation 33-42
9 Findings 43
10 Suggestions 44
11 Limitations of Study 45
12 Conclusion of Study 46
13 Annexure 47-48
Bibliography 49
Synopsis Copy 50
1. INTRODUCTION
India has been rapidly venturing into the plastic money business. In today's
economy the credit cards are being widely used. During the past decades,
these cards have become more and more popular in India. The holders are
relieved from the risk of carrying cash or cheque book with those, owing to
revolving nature of credit, the customers can take advantage of it, and when
he pleases, within the overall limit.
The purchasing power of the card holder increases to the extent of credit limit
given in the card, if wisely used, credit cards can provide them extra money,
interest free. The choices available in the market are money and most cards
offer different features filling petrol on priority, easy overseas travel, special
privilege for women a six by four-centimetre plastic card makes possible all
this and more plastic culture has caught on in India, the initial years have been
shed and cards have become virtual currency.
1.1 Brief-
A credit card is a device which enables the holder to obtain goods on credit
from specified supplies. The holder of the card, in some cases, has to pay the
yearly subscription and the suppliers also have to pay commission on sales to
the bank or the body issuing the card. The suppliers are paid promptly and so
are protected against bad debts, while the holder makes a single monthly
payment to cover all his purchases for that period. Credit cards are issued
only after the applicant’s credit worthiness has been accepted as satisfactory.
1.2 CURRENT SCENARIO
In order to encourage the use of the card, the policy initiatives and the
regulatory stance of the Reserve Bank of India have been focusing on
increasing the acceptance and penetration of safe, secure and efficient non-
cash payment modes comprising cheques, credit/debit cards, and transactions
through ECS/RTGS/NEFT, over the years.
2. IMPORTANCE AND SIGNIFICANCE OF THIS STUDY-
2.1 Personal Credit Benefits-
For Individuals, credit cards are an important part of everyday life. Whether
purchasing gas and groceries or reserving a hotel and rental car for an
upcoming vacation, credit cards represent a convenient and secure form of
payment for consumers. Benefits ranging from damage protection on
purchases to the ease of disputing suspicious charges or fraudulent activity
make credit cards an attractive form of payment.
Beyond the ease of use and added security, credit cards can also help you
build a solid credit history. With regular use and prompt payment, responsible
consumers will find that lenders are more willing to offer them additional
credit in the form of increased credit lines, mortgages and consumer loans.
2.2 Business Credit Benefits
New businesses and entrepreneurs looking to embark on a new business
venture often find capital hard to come by. For small businesses, credit cards
represent an important financial lifeline when traditional funding sources,
such as small-business loans, aren’t available. Credit cards help businesses
financially, and they also have a positive impact on small-business growth.
2.3 Effects on Economy
Credit cards are not only important for individuals and businesses; they’re an
important aspect of continued economic growth. Cash works best in face-to-
face transactions and checks take time to cash. Credit cards and electronic
payments, however, make functioning in a global marketplace much easier.
This ease encourages long-distance transactions that increase gross domestic
product and consumption, both of which lead to job creation.
2.4 Rewards Programs and Other Benefits
Many modern credit cards attempt to entice cardholders by offering additional
consumer benefits and rewards. Based on the type of card you have, you may
qualify for rewards such as cash back, discounted purchases, trip cancellation
insurance and air miles. With a little comparison shopping, you can find a
credit card that offers rewards to fit your lifestyle.
3 SIGNIFICANCE OF THIS STUDY
3.1 Benefits to cardholder-
The main benefit to the cardholder is convenience. Compared to debit cards
and checks, a credit card allows small short-term loans to be quickly made to
a cardholder who need not calculate a balance remaining before every
transaction, provided the total charges do not exceed the maximum credit line
for the card.
Financial benefit is that no interest is charged in the case when the full
balance is paid within grace period.
Different countries offer different levels of protection. In the UK, for
example, the bank is jointly liable with the merchant for purchases of
defective products over some amount of numbers.
Many credit cards offer rewards and benefits packages, such as enhanced
product warranties at no cost, travel rewards, free loss/damage coverage on
new purchases, various insurance protections, for example, rental car
insurance, common carrier accident protection, and travel medical insurance.
Credit cards can also offer a loyalty program, where each purchase is
rewarded with points, which may be redeemed for cash or products. Research
has examined whether competition among card networks may potentially
make payment rewards too generous, causing higher prices among merchants,
thus actually impacting social welfare and its distribution, a situation
potentially warranting public policy interventions
3.2 On cards & craze
If you dig deeper you will find that there’s a method behind the card madness.
Actually, having more credit cards increases the customer’s overall credit
limit. Some people get a sense of security in carrying more than one card, just
in case one of them doesn’t work.
The craze of cards originates from the rising requirements and comfort
seeking attitude. Suppose a person owns five credit cards, there’s a clear
division of labour between all of them.
Say- Standard Chartered card to shop, the ABN card to pay for petrol, the SBI
card for balance transfer and the ICCI card for net shopping. And may be the
Barclays card to pay the insurance EMI.
Co-branded cards have added to the complexity of the market. Such cards,
where a bank ties up with another organization such as an airline, gives an
opportunity to the customer to earn bonus points that may accrue some
additional monetary benefit.
Bookstores offer discounts to loyalty cardholders. So do petrol pumps.
Airlines compete with each other to attract the customers through frequent
flyer cards; mileage points can be exchanged for free flights. Apart from this,
in-flight privileges include increased check-in baggage allowance and priority
for confirmation on waitlist.
3.3 On cards & criticalities
However, there’s also a flip side to the card rush as well. Multiple cards lead
to some problems for customers like losing track of the different bills each
month and hence falling behind on payments; sometimes the temptation of
high credit limits entice customers to overspend.
4 Literature Review
Indian Credit Card Scheme: An Analytical Study
Dharmendra Mehta
Reader, Faculty of Management Studies, Pt.JNIBM, Vikram University, Ujjain, India (MP)
Hitendra Trivedi
Research Scholar, Faculty of Management Studies, Pt.JNIBM, Vikram University, Ujjain,
India(MP)
Naveen K Mehta
Associate Professor, SUBIS, Bhopal, India (MP)
5 3. Research Methodology
6 The present study is based on the secondary data collected from NABARD
Journal,Publications, Occasional Papers, and RBI Reviews etc. The other
information has been taken from journals and websites focusing Kisan
credit card scheme.
