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Bankers and business groups welcomed Bank Indonesia’s latest plan to revamp credit card rules, saying that such a rule would help reduce the potential of bad debts.

However, an industry player raised concerns that imposing income cap and credit card ownership limit could be difficult with current limited infrastructures.

Darmadi Sutanto, a director at Bank Negara Indonesia, said that banks would benefit from the central bank’s latest ruling.

“I think it’s normal to limit the number of credit cards that one can have based on their income. It would help reduce bad debts,” Darmadi said.

BI said the new rules will impose tighter controls on credit cards. To head off potential problems, there will be more stringent creditworthiness requirements and interest rate caps.

The new rules, to be effective from Jan. 1, 2013, stipulates that a person is only eligible for a credit card if they make at least Rp 3 million ($336) in monthly income and can only hold two credit cards if their income exceeds Rp 10 million. A minimum 21 years of age or married status is also required.

The credit card business has expanded over the past five years. According to data from BI, credit card transactions increased to Rp 163.2 trillion in 2010 compared with Rp 72.6 trillion in 2007. In the first nine months of this year, the credit card transactions value reached Rp 120.9 trillion.

According to the Indonesian Credit Card Association (AKKI), there were 14.4 million credit cards in circulation as of last month, compared with 13 million at the end of last year. Each month, more than 100,000 new cards were issued.

BNI’s Darmadi said that banks have been moving toward more prudent practices in the credit card business.

According to data from the central bank, as of August, credit card bad debts reached Rp 1.59 trillion, down 36 percent from August last year.

Citigroup, HSBC and Standard Chartered Bank are among the foreign banks that offer credit cards to Indonesian consumers. BNI, Bank Mandiri, Bank Negara Indonesia and Bank Central Asia are among domestic providers.

AKKI chairman Steve Marta said the new rules would not necessarily prevent banks from extending credit card their credit card businesses.

Under the new rule, banks would only be able to charge a maximum monthly interest rate of 3 percent, compared to up to 3.75 percent currently.

The ruling also directed banks to only grant credit limits that are no more than triple the customer’s monthly income.

Steve said banks in Indonesia would not have problems complying with the interest rate cap because credit card risks would also be reduced.

“With current infrastructure, I don’t think that we can easily impose credit card limitation,” Steve said.

The new rules follow four years of global economic turmoil that was in part triggered by relaxed lending standards in the US housing market.