Bank Body To Share Defaulter Data

India Co-operation Committee, a forum of domestic banks having affiliation to MasterCard International, has extended its negative file project to include details of retail, home, car and consumer loan defaults by customers of member banks. The purpose behind the move is to share information on defaulters.

The project earlier used to maintain database of credit card defaults of the member banks to prevent the defaulting card holders from perpetrating the misdemeanour in other banks.

"At present, the banks which have affiliation to MasterCard either through the credit card or the debit card are part of this negative file project and we expect more banks to join in this effort soon," Sameer Vakil, vice-president and country manager, South Asia, MasterCard said.

He pointed out that MasterCard was in the process of rolling out a financial management tool (an illustrative finance planner) for credit card holders so that they spend more responsibly and do not overstretch their finances.

That the domestic card payments market, which has to contend with cash and cheque payments, is still at a nascent stage is clear from the fact that only 0.7 per cent of personal consumption expenditure come via credit cards.

"The average per credit card annual spending in the country stands at Rs 16,000. While 60 per cent of the card holders use the cards for transactions, the balance do not use at all," Vivek Kudva, senior manager (personal banking and cards), Hong Kong and Shanghai Banking Corporation, said.