Being a bad customer is a losing proposition in more ways than one in banking, credit card and insurance relationships.

For, not only does the delinquent client cough up penalties and earn a tainted image, he also loses out on a clutch of freebies and discounts that are offered to good customers. Technology-savvy private sector banks do this by profiling their customers.

V Vaidyanathan, senior manager, retail banking, ICICI Bank told Business Standard using technology helps to delineate customers based on their account maintenance, number of transactions made, repayment of loans etc. "No bank wants to lose a good customer and therefore we offer some value-additions," he said.

For example, interest on unsecured personal loans vary between 19 and 20 per cent. But customers with a good rating can avail of it at 15 to 16 per cent.

A banking official said increasingly banks are recognising the need to offer incentives and value additions to encourage and retain good customers.

He added earlier a good customer was defined by the adherence to the repayment schedule on loans advanced. Now yardsticks for qualifying as a good customer are different.

It would include maintenance of the requisite minimum balance in saving accounts and volume of ATM transactions, among other things.

Vaidyanathan said in the case of credit cards, high net worth customers who pay on time are offered special rewards. There are various special rewards offered by banks, as they have a tie-up with various retailers.

ICICI credit cards has about a customer base of 2.3 million and the delinquency ratio is about seven to 10 per cent for the year ending March 31, 2004. In credit cards, if the customer does not pay the credit availed of within the 45 days, he is charged an interest of 3 per cent.

Antony Jacob, Managing Director, Royal Sundaram Alliance Insurance Company, said, "When the own damage segment under the motor insurance portfolio is detariffed in April 2005, customers having a accident prone record or who are bad drivers will be paying a higher premium on their policies."

He added that customers who are careful drivers with a good driving record and maintain their vehicles will be paying a lesser premium on their policies.

At present the motor insurance portfolio is under a tariff regime determined by the insurance regulatory development authority, therefore the premiums on policies cannot be determined by individual insurance companies.

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