LIC-GE Money MoU for credit cards lapses

"The initial MoU period is over, but the project is on. In one or two weeks, we may soon announce the launch of some aspects related to the credit cards company," said Hemant Bhargava, CEO, LIC Credit Cards Company.  A senior LIC executive added that there are some issues that are being thrashed out. "Till GE Money does not tell us that this venture is off, it is on," he told Business Standard.  When contacted, a GE Money spokesperson said, "Strategic partnerships have been a key pillar of GE Money's growth globally and in line with this strategy, partnerships will continue to be critical to our growth in India. GE Money continues to work closely with LIC to finalise its proposed joint venture and to ensure the future success of this partnership."  GE Money has a tie-up with State Bank of India and SBI Cards, their joint venture, is the second largest card company. While SBI was not too happy with the way the company was being run and had incurred losses of around Rs 150 crore last year, executives at the country's largest bank were also peeved at GE Money's decision to tie up with LIC.  But SBI and GE Money have put their differences behind them and have decided to extend their partnership. This has raised speculation that GE Money and LIC may put their deal on the backburner.  On September 6, 2007, LIC (40 per cent) had announced an MoU with GE Money India (35 per cent), Corporation Bank (5 per cent), LIC Housing Finance (4 per cent) and LIC Mutual Fund AMC (2 per cent) to create a new credit card company that was to leverage the strengths of each company.  The remaining 14 per cent stake is to be offered to financial investors. The parties had aimed to finalise definitive agreements by the end of October 2007. The MoU was valid for 90 days.  Despite the expiry of the MoU, officials of LIC and GE Money said they had held talks to ensure that the proposed credit card company is realised.