This is a perfect example of HSBC’s exportation of the Household International model of doing business. Credit card interest rates have been increased to as high as 50 percent in India. While proud of making a profit in developing nations HSBC is not alone. ICIC, Deutsche Bank, SBI and HSBC have either raised or are in the process of raising the “finance charges”. To top it all, these high charges, which varied between 30-40 per cent until a few days ago, fly in the face of Indian regulators, who recently said “charging of interest at rates in excess of 30 per cent per annum from the credit card holders by banks for the formers’ failure to make full payment on the due date or paying the minimum amount due, is an unfair trade practice.”

When it comes to exorbitant interest rates, even the loan sharks can learn a few tricks from HSBC Finance. HSBC has been losing money in the U.S. and is worried about what will happen to their credit card portfolios in the U.K. and U.S. but the answer is simply “let the Indians pay for it.” Regulators in India have been told to go to hell, with first shot fired across the bow by these banks. Where does that leave the people of India? Obviously there is a bad taste in their mouths over this one.

If the banks can increase consumer debt, perhaps home loans to consolidate all payments will be the next step. Americans have a great subprime mortgage idea ready for export to India. It is also part of the “Household Model.”

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