Renewal of loans or disbursement of new / additional loans to the stressed borrower, closer to the repayment date of the earlier loans. Use of Internal or Office accounts to adjust borrower's repayment obligations.Ĥ. Good borrowers being persuaded to enter into #structured deals with a stressed borrower to conceal the stress.ģ. Bringing two lenders together to #evergreen each other’s loans by sale and buyback of loans or debt instruments.Ģ. Some of which are (quoted verbatim from the speech):ġ. On the other hand, Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted that the central bank is aware of some "innovative ways" to conceal the status of the stressed loans in the banking industry. On one hand, Nifty Bank is touching all-time highs this week. #Insurance commission income: comprised of commissions or incentives that they earn as a corporate insurance agent in selling their partners’ insurance products (you might have noticed how CC companies talk about free insurance bundled with their cards). #Business Development Incentive Income: comprised of contractual business development incentives that they earn from payment networks under long-term contracts.ģ. #Service Charges: primarily comprise commission from selling of third party products (like card protection plans), share of accelerated reward points cost recovered from partners, brand association fee charged to partners, transaction revenue from aggregators.Ĥ. (c) #Instance-based fees: Yes, these include late fees, along with reward redemption fees, cash withdrawal fees, overlimit fees, payment dishonour fees, processing fees etc.Īs you can see from the chart, interchange fees (spends) is more than the random fees they charge like late payment (instance)ģ. (b) #Spends-based fees: MDR/interchange fees + foreign exchange markup income on international transactions. (a) #Subscription-based fees: primarily consist of credit card membership fees and annual credit card fees The second highest income source (~42%) is from fees and services. number of transactors on their platform at 37%, followed by term (EMI) customers at 32% and finally customers who revolve their balance at 27%.Ģ. These folks hardly generate any revenue for the company) (Side note: The rest of the customers who use credit cards and pay the bill on time are simply called #transactors. (b) customers who opt for EMI facility and pay interest on it over a specific #term or period. (a) customers who pay the "Minimum Amount Due" on their credit card bill and #revolve the remaining balance to the next month and Their highest income (~49%) is from interest on dues. Here's a breakdown of their revenue structure:ġ. "Are late payment charges higher than income from MDR/interchange?" Yesterday's post on SBI Card had a common doubt on their business model:
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