All those banking customers, who were denied a credit card because they did not belong to the secured salaried segment, can now become swipe-happy. The Development Credit Bank has soft launched its DCB PayLess – a credit card which allows customers to avail themselves credit, while enjoying regular returns from a regular fixed deposit.

“We are launching this card primarily for the micro, small and medium entrepreneurs (MSME) segment, but even housewives, self-employed, and so on, can avail themselves of this product,” Mr Abhijit Bose, Group Senior Vice-President and Head – Retail, MSME Assets and Cards business, Development Credit Bank, told Business Line . The bank has test launched this card in Bangalore, and wants to position it as a credit history build-up card. With the number of MSME entities in the country estimated at 35 lakh, the bank looks at this segment for a bulk of its payless card business.

To get this card, customers have to make a fixed deposit of a minimum of Rs 25,000. “If they place a deposit with the bank, 90 per cent credit is loaded on the card,” he explained.

For instance, a deposit of Rs 50,000 would enable a customer to enjoy credit limit of Rs 45,000. Besides, the deposit continues to accrue interest. As with a credit card, the repayment period for the credit availed would be 15-45 days, and the interest charged on late repayment is 24 per cent. On credit cards, banks normally charge anywhere between 30 and 40 per cent on dues. Besides, the late payment fee is also Rs 100, as against about Rs 400-Rs 500 charged on credit cards. “The fee is charged to discipline customers with regard to repayment,” said Mr Bose. However, in case an account turns delinquent, the bank would adjust the depositor's original deposit with the unpaid dues, thus avoiding undue risk for the bank, pointed out Mr Bose.

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