SBI Card, while growing at around 40% over the last few years, has maintained delinquencies between 2.2% and 2.3%, managing director & CEO Hardayal Prasad tells Shritama Bose. The State Bank of India (SBI)-owned credit-card company may get listed around FY20, he adds. Excerpts: Credit card lending has risen exponentially in recent years. Is undue risk being taken? Some people have taken undue risk. I am in the P2M (peer to merchant) segment. I see delinquencies being low despite a growth of 40% CAGR (compound annual growth rate) over the last three-four years. One of the reasons is that since 2006-07, when the credit bureaus came in, there has been great awareness among customers that they need to maintain a good credit history. We will always have people who will default, but the delinquency rates are quite manageable and it's not alarming at all. What has business growth been like in FY18? Growth is being driven by the fact that the penetration of credit cards, in comparison to our GDP (gross domestic product), is very low. We were doing around 60,000 cards a month prior to demonetisation. Immediately after demonetisation, for a year, we found that go up to one lakh cards. So between November 2016 and September 2017, we were doing one lakh cards every month and over that period, we added one million cards to the existing base of four million. At present, we have around 6.3 million cards outstanding. The customer acquisition has taken my market share to 16.7% from 15%. What about spends? On spends, the overall monthly spends have risen from Rs 4,000 crore in March 2017 to Rs 7,000 crore in March 2018. The market share in terms of spends was 13% earlier and it rose to 17% in March 2018. When can we expect your initial public offer (IPO)? For the next one year, we can\u2019t tell you what will happen. The bank is definitely thinking about it, but it may not immediately happen. It may happen in FY20. What is the plan for tapping into State Bank of India\u2019s (SBI) customer base? In October, we signed an agreement with SBI and Cibil, under which SBI is to cull out its own data, analyse it and use it to source applications for us. There is a reciprocal arrangement with them. We give them the models with which we work. Between October and February, five lakh accounts have been generated through the cross-selling done under the agreement. We give them cut-off limits for different products, on the basis of which customers are sourced. For example, we may give them a Rs 50-lakh cut-off for home loan customers. If such a customer doesn\u2019t have a credit card, we will approach them after running them through the Cibil database. This year, five lakh customers came from SBI and another five lakh came from the open market. What share of your customers are new-to-credit? About 10-15% of the customers we source are new-to-credit. Importantly, much of this is coming from tier-2 and tier-3 cities. They are contributing significantly to spends also. Twenty percent of their total spends are online. Since they don\u2019t have a credit history, it\u2019s a little difficult to assess them. So for them we do a secured product, which means that I create a lien on the customer\u2019s bank deposit so that they can start building their credit history. At some stage, if their credit behaviour is good, I allow them to take back the deposit. What share of your customers would be from beyond tier-1 cities? We see about 40% of all our transactions and 45% of spends coming from beyond the top 10 cities. In the last one year, growth in transaction volumes from these cities has been around 60%, while spends have grown 70%. What are delinquency rates like? The delinquency rate moves between 2.2% and 2.3% for us as well as the industry.