Credit Cards

Letter dated 9 March 2006 addressed to

Mr. A.K. Purwar, The Chairman, State Bank of India, Corporate Centre, State Bank Bhavan, Madame Cama Road, Mumbai 400 021, Maharashtra.

I enclose my observations on the present day functioning of the Credit Cards in our Country especially by the SBI Card vis a vis Insurance companies for your kind information and necessary amendments may be made based on the following facts.


Credit Cards

Credit Cards are designed

First – to promote plastic money thereby reducing dependence on paper money –
A Savings to the Ex-Chequer.

Second - to provide easy and flexible line of Credit to deserving people.

Third - to popularize the plastic money its credibility has been ensured.

Hence if accepted by a vendor for goods sold and or services rendered the vendor is assured of reimbursement without any delay or demur under all circumstances.



Insurance and similar services.

Insurance and similar such services are designed

First – to provide solace to the dependents of the Insured in case of calamities.

Second - to provide an avenue to save for the future.

Third - to avail the benefits offered by the Income Tax Authorities for such
Savings.

Hence when a person go in for such Insurance and similar schemes his interest is the foremost and has to be protected first as the Insurance Companies are already protected well by various legislations.


SBI Card Vs Insurance

The Insurance service provider is well protected in case of non payment of premium, by the Policy Holder.

The Insured, the individual only has to pay his premium in time to protect his interests by keeping the policy in force.

Hence only the Insured is at the receiving end and when the Insured opts for the payment of any premium through any Credit Card only the Insured’s Mandate is Supreme and the Credit Card Service provider has an obligation only to the Insured and not to the Insurance Company as the Interest of the Insured is only at jeopardy in case of disputes and in no way the Insurance Company is put to any loss by non payment of premium. The Credit Card Service provider is to safeguard the Stake of the Insured only in such cases and not vice versa.

Now the rules governing the Credit Cards take care of the Insurance Companies only and do not accept the instructions of the Insured which is not fair as explained in the above paragraphs .


I request you, Sir to reconsider the present stand of the Credit Card Organisations and please reverse the situation to protect the interests of the Insured and not vice versa.

Thanking you, Sir,

I remain,
Yours truly,
E.V.S. Aranganathan.