The State Bank of India has decided to take over the helm of its struggling credit card joint venture with US multinational GE, which has been losing money for nearly two years now after a good start.
SBI Cards was the only joint venture in which SBI?s partner got the CEO?s chair.
SBI Chairman OP Bhatt said, ?so far the CEO used to be from GE but now we are putting our own CEO. We are also putting a dozen senior officers in that company.?
?There was a loss of about Rs 150 crore last fiscal,? he said. The credit card business, the only SBI joint venture in which the partner got the CEO?s post, has been losing money for the last 18 months after doing ?extremely well? since inception.
?This company did not do well? in fact, it has posted a loss this year, and now the CEO?s position is being taken over by SBI,? Bhatt said. He stressed that GE is one of the best global companies, and the joint venture would stay. ?We are also changing the risk management practices,? he said. As for the impact of the proposed mergers of the subsidiaries with SBI, he said the bank has already made full provisioning under AS 15. SBI alone has provisioned Rs 4280 crore under AS 15 and its subsidiaries put together Rs 2500-3000 crore.
On its general insurance foray, SBI has shortlisted two partners and expects to chose one by the end of May, Bhatt said.