SBI, the nation's largest lender, entered credit card business in 1998 by roping GE Capital India, the consumer finance arm of US-based GE Capital.
State Bank of India is likely to finalise a replacement for GE Capital, its joint venture partner in SBI Card, in the next two months.
“In the next two months identification should be done and by September there would be clarity on this issue. The process is moving at a fast pace,” SBI Cards and Payment Services CEO Vijay Jasuja told PTI.
The American company has decided to exit from SBI Card and the process for finding partner who could pick up 40 per cent GE stake is going on.
If the option of selling partner’s stake to another investor through a private placement does not materialize, SBI has the option of buying back stake from GE. Besides, it can go in for a public issue.
As per an agreement between SBI and GE Capital at the time of formation of SBI Card, it was decided that whenever any party decides to exit the JV, the decision has to be on the basis of mutual understanding.
SBI, the nation’s largest lender, entered credit card business in 1998 by roping GE Capital India, the consumer finance arm of US-based GE Capital.
Currently, SBI Card’s board has eight members, with three from GE Capital.
There are reports that private equity funds such as KKR, Bain Capital and Baring Asia are weighing options to buy stake in the company. Besides, Tata Capital is also looking at the option.
SBI Card has around 3.75 million credit cards in circulation, making it the third largest player in the sector after HDFC Bank and ICICI Bank, with a market share of 15 per cent in 2014-15.