After parting ways with GE, state-owned Life Insurance Corporation of India (LIC) has decided to tie up with Corporation Bank for launching a white labelled/co-branded credit card. LIC already holds a 27% stake in Corporation bank.
Through this tie-up, LIC aims to offer premium-payment facility to policyholders with their own credit card. Not only will this provide added convenience and service to LIC customers, it will bring down transaction costs for the insurance company as well.
LIC chairman TS Vijayan told FE, “We have already sent a proposal to the bank, but are yet to receive any communication from them for our proposed credit card venture.”
An official of Corporation Bank, on condition of anonymity, said that the bank will extend its existing credit card facility to LIC by using both Visa as well as MasterCard platforms. The decision as to whether the card will be co-branded or independent was yet to be taken, said the official. Yet another thing which was to be settled between the two prospective partners for the card business was how much stake Corporation Bank will have in the venture.
Life Insurance Corporation of India has already decided to form a separate wholly-owned company “LIC Cards Services Ltd” to manage all aspects of its credit card foray. LIC has been permitted by the Government of India to form the wholly-owned company for this purpose.
LIC Cards Services Ltd will leverage LIC and Corporation Bank’s strong brand and extensive branch, ATM, and sales distribution network.
In line with the corporate vision to emerge as a trans-nationally competitive financial institution, LIC has been planning to bring out its credit card to leverage its large customer base, strong brand and wide distribution network for some time now.
Through its newest venture, it seeks to provide value added service to its customers.