Sbi Set To Launch Debit, Smart Cards

The State Bank of India (SBI) is getting ready to unveil its debit card and smart card. Sources said the bank is in the process of firming up on the modalities of its debit card issue.

"It is closely looking at both the options -- whether it can be issued through its joint venture with GE Capital which had launched its credit card or it can go ahead alone."

"In India, we expect the debit card to grow well because a large segment of account holders are not eligible for credit cards. Also, many Indians are credit averse and they do not want to borrow and spend due to interest cost and other charges. Debit cards are a convenient way to access deposits with the bank," said a senior SBI official.

 

SBI is also introducing a co-branded smart card along with Indian Oil Corporation. The smart card will be launched by the end of February and can be used in petrol pumps as well as large number of retail outlets.

"Smart cards will cater to particular segments. This will benefit people who are not eligible for credit cards or do not want to take a credit card or a petrol card," said the official.

In the recent past a slew of banks have launched debit cards. The list includes Central Bank of India -- the only public sector bank to launch a debit card.

According to Visa International, debit cards have grown from around 4,00,000 in April 2000 to 1.6 million in December 2001. During the period, credit cards have grown from 4.3 million to around 6 million.

MasterCard International predicts that debit cards will account for the single largest number of payment-card transactions worldwide by 2005. It is expected that the debit card growth would continue to maintain its rate of growth.

Debit cards help banks to increase their float-money as customers, instead of withdrawing cash from their accounts, pay directly for their purchases through the card.

SBI cards are one of the fastest growing in the industry. It has outpaced all other players in the industry. The card has grown 227.27 per cent from 2.75 lakh on April 1, 2000, to 9 lakh as on December 31, 2001, and is slated to cross the one-million mark in this quarter.