At present, a very few banks offer credit cards to the employees of corporate houses, but if the response from these bankers is anything to go by, the market does not seem to have any future.
Why The limitations are that corporates have to be committed to clear all bills, incurred by the employees and liability shift to the corporates. The likes of ICICI Bank do not have any larger plan to increase volume in this segment.
This is mainly because of lack of interest as part of the corporates as the liability is totally up to them. The cards are issued in personal names but the fourth line embossing make the corporates liable to the payment of the bills.
However, it is gathered that State Bank of India (SBI) is currently exploring the option to enter the market. At present SBI does offer this facility through its corporate tie up. But SBI has plans to tap corporates for corporate credit card business.
What are the benefits in this business. There are some positives for the corporates if they allow banks to sell cards to the employees. Says V Vaidyanathan, senior general manager and head retail group of ICICI Bank: Corporate gets a gamut of benefit in form of MIS, it does offer value for corporate to choose this. This credit card varies sort of MIS to the corporates, ie, spends, by various categories like trends, hotels etc. This helps the corporate understand the various spending pattern of its employees and then helps the corporates in their financial planning. u