Generation next is giving bankers sleepless nights

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: Pravin and Puneet, in their early 20s, were working in a call centre, each earning a sum of Rs 40,000 a month.

While Pravin managed to accumulate sizeable savings in his account, Puneet kept taking on more debt that eventually burnt a hole in his wallet.

Money management is a burning issue for India’s e-age youth today. To illustrate, the median age of the credit card user has come down to 27 years from 45 a few years ago.

It is the ‘you only live once age’ consumer influenced by the western ‘live-on credit’ culture that is causing concern. Peer pressure too is doing its bit. So, despite a red Ferrari and a beautiful home, they don’t stop! As a consequence, many young middle-class Indians are up to their necks in debt, creating a situation where they may wallow in it for the rest of their lives. Sensing this could be disastrous not only for the customer, but also for the banks, the latter have designed financial literacy packages to help customers take prudent financial decisions.

As American business tycoon John Paul Getty says, “If a customer borrows $100 from a bank, it’s his problem. But if he borrows $100 million from a bank, it is the banker’s problem!”

Bankers take to customer education

Keeping in mind the emerging needs and sensitivities of the modern youth, Citibank has released a 40-page booklet on how to ‘use credit wisely’ that addresses various concerns related to credit card usage. According to Citigroup India’s global consumer group manager Sarvesh Sarup, “With our ‘use credit usefully’ programme, we want to create a culture where the customer becomes aware about the importance of financial planning and judiciously uses credit.”

This programme is particularly targeted at the youth employed at call centres, who have access to high disposable incomes, but do not know how to use this money wisely, he adds.

Banks have used various media to reach out to the masses, be it via booklets, manuals, internet or on-ground initiatives.

ICICI Bank, the largest private sector bank in the country, is using two platforms in its endeavour to spread financial literacy among its customers. It publishes a periodical manual called ‘money matters,’ through which it guides customers to choose appropriate investment options. “By reading these manuals, customers get an insight into how they can choose the right loan for purchase of a house or cars,” the ICICI Bank spokesperson said.