Speaking at the press conference, SBI chairman MS Verma said the joint venture is confident of getting 30 lakh cardholders by the end of 2001 which translates into one-third of the market. Verma addressed the press along with GE Capital executive vice president Nigel Andrews and Visa International Asia-Pacific president and CEO Dennis Goggin soon after a hi-tech laser show.

The SBI Card will provide the bank with a vehicle to enlarge the personal banking segment, Verma said. In the offing are several deposit products which will ride piggy-back on the card, he said. At present, the bank is offering a `plain card' without any added features. The next few months will see some special cards, co-branded cards and several add-on features. ``Apart from getting into a newbusiness area, the concurrent objective of the joint venture is to promote the plastic money culture in the country,'' he said.

The joint venture beween SBI and GE-Capital has been structured around two companies. SBI Cards & Payment Services Ltd will focus on marketing and distribution of cards. In this company, SBI will have an equity share of 60 per cent with GE holding 40 per cent. This proportion has been decided because in the card-issuing exercise, SBI will play a larger role. In the processing company -- GE Capital Business Processes Management Services Ltd -- GE will contribute to a greater extent on account of its investments in technology. Therefore, it will hold 60 per cent of the equity and SBI 40 per cent. An authorised capital of Rs 100 crore has been decided for the two companies. At present, the investment has been in the vicinity of Rs 10 crore. ``The joint venture has not been capitalised to a higher extent as the card business does not require high cash infusions,'' Verma said.

To givemomentum to the new product, the initial payment for the card has been kept at Rs 750 per annum which is lower than the initial payment required by cards issued by some of the foreign banks. An added feature is 50 days of interest-free credit and an extended credit option. It offers all the regular features offered by cards in a comparable segment such as lostcard protection (where the maximum liability has been pegged at Rs 1,000), free accident insurance cover for loss of life and easy cash access which will be provided from designated SBI branches.

The SBI-GE Capital joint venture is expected to intensify competition in the credit card market. While SBI is the largest bank in the country in terms of branches, GE Capital with global assets amounting to $250 billion is one of the largest players in the international arena.