Deal to replace GE Capital as partner in SBI Card likely soon

SBI Card said it had seen 25-30 per cent rise in card spending after demonetisation

A deal to bring in a new partner in SBI Card to replace GE Capital could get sealed in the coming two to three months, according to State Bank of India (SBI) executives.  The card company is a joint venture between SBI and US-based conglomerate GE Capital. The latter plans to exit the venture, as part of a global restructuring activity.
 
SBI had earlier indicated that the process to find a new partner for the card venture was to be completed by September 2016. The bidding and selection has been a complex process, SBI group executives said. 
 
The business is divided into two parts — one that deals with marketing and distribution, SBI Card and Payments, and the back office and technology arm, GE Capital Business Processes Management Services. While GE Capital holds 40 per cent stake in the first entity, it holds 60 per cent stake in the latter.  Meanwhile, SBI Card, which launched a premium co-branded card in association with the Future Group, said it had seen 25-30 per cent rise in card spending after demonetisation. This was despite a fall in certain segments, such as fuel, jewellery and other discretionary spending.

 
SBI Chairman Arundhati Bhattacharya said before demonetisation, SBI Card were getting 65 per cent of the transactions on cards. After demonetisation, it had gone up to 85 per cent. In November, spends had actually declined but the number of transactions went up. Subsequently in December it picked up again as there was 35-50 per cent increase in the number of transactions during the month, said SBI Card Chief Executive Officer Vijay Jasuja.