He was delivering the inaugural address in Bangalore on Wednesday at a two-day seminar on "Credit Cards - Issues and Strategies for Banks'' organised by Vijaya Bank.

Laying emphasis on proper assessing and controlling credit risk, he said a mechanism was needed to systematic credit-card issuance.

He said the identification of a target group must be based on income levels and credibility. Proper training must be provided to the field staff.

Of the cardholders, at least 30-40 per cent are dormant users, who must be lured into using their cards, he said.

Commenting on the revenue department's decision to assess tax records of cardholders, Sridharan said the move would jeopardise card-issuing banks. According to him, the government must rethink its strategy of targeting cardholders and that the centre should look for alternative sources of revenue.

In his presidential address, Vijaya Bank chairman and managing director V Leeladhar said a credit bureau would provide a vital link between the sundry card operators. This is imperative to nip card frauds. There is a need for regular exchange between card operators to identify delinquent customers and fraud-prone areas. A credit bureau would help the process, he said.

In his presentation, Visa International country head Chandra Agnihotri said around eight million potential cardholders stay in 12 cities. They should be tapped. According to him, a market exists for cards that must be tapped correctly and there is no need for market creation in the country.

Visa Electron to hit the market: Visa International is all set to announce the launch of Visa Electron, its debit card. The company is likely to tie up with major public-sector banks, including State Bank of India. While an official announcement will be made within two weeks, the launch will take place after Visa ties up with a bank. According to Chandra Agnihotri, Visa has its infrastructure in place and spent several months studying the potential of the card. MasterCard has taken the lead in the country in the debit-card business with its Maestro card. Citibank had tied up with MasterCard earlier this year to introduce the card in the country.

Commenting on the possibility of introducing a smart card, Agnihotri said Visa was running pilots in over 60 countries around the world, and it was felt that the conditions here were not conducive.