Characterization of Adopters and Non Adopters of Credit Cards in Indian Banking Industry

Abstract

In Indian banking industry, plastic cards can be considered as one of the product as well as process innovation in which Credit Cards have gained prominence as a delivery channel for conducting banking transactions. The present study investigates the recent issue related to the launch of one of the innovation in plastic cards in Indian Banking Sector. The main objective of the study is to identify the characteristics of the banks which could have been affected with the adoption of Credit Cards. For this purpose, all the scheduled commercial banks (79 in number which consists of 27 Public Sector Banks, 23 Private Sector Banks and 29 Foreign Sector Banks) have been taken as sample. The whole sample of banks has been categorized into adopter and non adopter groups. The time period of the study is of 14 years i.e. from 2000 to 2013. Various Bank specific variables Viz. Age, Efficiency, Size, Asset Quality, Profitability, Diversification, Capitalisation, Cost of Operations, Financing Pattern, Liquidity and Industry Advantage have been taken into consideration which may help to demarcate adopters and non adopters. It has been concluded that the initiators and adopters take advantage over the non adopter ones and thus former have found to perform better in terms of various parameters. Overall, the adopter banks are larger in size, older in age, more profitable, having lesser branches, more market share and more liquid as compare to late adopter ones.