Personal debts among youth on rise

Chennai, Aug 13 (UNI) Fascination towards high life style and consumer spending is leading the youth to wage an unending war against their payments on personal loans and credit cards.

The boom in IT and ITES industries had fuelled the scope for employment at a young age. Affinity to modern life style and latest technical gadgets drag them to the doors of all those agencies, who offer them a lot in the form of credit cards and personal loans.

Quoting figures, a new generation private bank's south business head said the bank on an average sells 19,000 credit cards per month. Though there was no criteria to sort the applicants based on their age, he said about 30 per cent of new credit cards applicants were youth.

He said the delinquency rate at present was between 15 to 30 per cent.

Financial Adviser and Director of Spectrum Financial Consultants Private Limited N Swaminathan said the growth of debt among the youth had been fuelled by excessive consumer spending and immaturity.

''The biggest villian is personal loans. The liquid cash they avail through these loans go for acquisition of temporary assets like fancy mobile phones and clothings. From time to time, sudden expenditure faced due to hospitalisation and even loss of job make the situation even worse. At times they are forced to take extreme steps'', he said.

Bank Employees Federation of India (BEFI), Tamil Nadu General Secretary A Rengarajan said the private sector banks trap young minds by revealing only the fashionable aspects and concealing the draconian aspects of credit cards and personal loans.

''These banks loot people with several hidden charges. They even resort to unethical means to collect the debt'', he alleged.

ITES employees Gopi Krishnan and Sumesh, based at Chennai said, ''within no time we join an organisation, we start receiving calls in our mobile phones from agents of different private sector banks, enquiring, whether we need a credit card or personal loan and ultimetely manage to convince us to acquire one.

''At the time of selling, the marketing personnel do not reveal much of the intricacies on default payment and other hidden charges.

They just want to add one more point to their sales target. Only after some time, the customer comes to know about the hidden charges'', they alleged.

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