The country’s largest lender State Bank of India (SBI) today said it expects to get on board a new partner for its card business in the next three months. Besides, the bank sees its card business becoming number one in the country in terms of issuance and user base on the back of innovative products and growing number of account holders. US-based General Electric (GE) has already announced its decision to exit SBI Card as part of its global restructuring exercise.
SBI is in the process of finalising the new joint venture partner, SBI Managing Director Dinesh Kumar Khara said. “There is process of identifying the buyer and the process is already on. It is in advanced stage. We will be waiting to hear from GE very soon. We expect that to happen maybe in one quarter,” he said after launching Prime, a premium credit card targeted at the growing segment of young, urban affluent consumers.
Following the exit, SBI’s stake in SBI Card will increase to 74 per cent while remaining 26 per cent will go to the new partner. SBI Card Managing Director Vijay Jasuja said the company, which has a base of 4.8 million users, plans to double the figure in one year. Currently, HDFC Bank is the largest credit card provider in the country with a base of around 7.8 million cards.
Jasuja said SBI’s aim is to be the largest credit card player in terms of card issuance in the next one year. “There are more than 30 million SBI customers who are eligible for credit cards. We will be tapping these customers to increase our card base. Even if we convert 3-4 million of these customers, we will be able to bridge the gap with the market leader,” he said.
Currently, SBI issues 150,000-180,000 cards every month and hopes to increase it to over 200,000 over the next few months, he added. The board of SBI has already given approval for hike of the bank’s stake in its two credit card joint ventures with GE to 74 per cent.
The bank has approval to infuse Rs 1,160 crore in the two JVs — SBI Cards and Payment Services Pvt Ltd (SBICPSL) and GE Capital Business Processes Management Services Ltd (GECBPMSL) — through purchase of equity shares from GE Capital so as to increase the bank’s stake in both the companies to 74 per cent.
SBI currently holds 60 per cent stake in SBICPSL and 40 per cent in GECBPMSL, with the balance being held by GE Capital in both the ventures. SBI entered the credit card business in 1998 by roping in GE Capital India, the consumer finance arm of US-based GE Capital.
The new offering Prime brings cardholders lifestyle privileges such as complimentary membership to loyalty programs of marquee brands like Vistara and Trident Hotels and complimentary international airport lounge access through the Priority Pass Program. Launched on the Visa Signature platform, it has also partnered with Reliance Retail, Big Basket and Pizza Hut to significantly enhance penetration in the new premium segment. The card, which comes with an annual fee of Rs 2,999, has a host of other benefits, Jasuja added.