Chillin' out till it needs to be funded
Amazingly, as RBI released monthly credit outstanding figures in the Indian Banking system (and we do not have any cross reporting from Banks or other quasi Federal institutions in this country) our safety was unwittingly highlighted again. The retail credit card debt outstanding is a mere Rs 200 bn or $5bn across the country and already 30% lower year on year as banks like ICICI,HDFC Bank and SBI pruned card portfolios in 2009, coming out just earlier this year. Even market leaders SCB and conservative HSBC have started restoring credit card limits for spenders. Despite lower default rates, retail cash interest rates have been high earners at banks with average rates maintained at 42% on this small base.
The inimitable DyME of the new fashionable midget livemint.com, Tamal Bandopadhyay also further contributed to regaining bankers trust with his expounding on default mechanisms and credit scoring in India. Retail Banking will be able to come into its own with public credit rating records now available from the meaty Credit info Bureau of India or CIBIL not to be confused with corp credit rating co. CRISIL. Credit rating venture FDI has been already approved for international ventures of Equifax, Experian and High Note in conjunction with local banking players. A lot of banks are still treating your credit record as a proprietary data for their own rating ventures planned and have been cavalier in updating your settlements, prepayments and loan closures selectively. We’ll probably end up making each personal credit record as expensive as the local call rates on mobile in continuing this customized tradition and we will also end up with a much customized record for each credit history miles and years away from combining into a single international record, but then we never even needed a credit record.
Lending Power to the masses
Also, retail credit is inherently linked to India’s retail investing capacity which got a fillip from the very mature devaluation for the ADAG stocks and corresponding uptick for the warring Reliance factions as RNRL struggles to even the keel in press. Another fillip for market participants was the lifestyle stock from Talwalkars which has been accepted seemingly as one of the recession proof stocks for the coming decade. However, more on the same later..esp as the possibility of passing on the cost of the RNRL gas to Dadri consumers crystallises over the next few weeks. Why else would I run a power project, esp UMPP in a fixed promised return regime. In fact the same fixed return has already been updated from 12% to 16% in 2005.