Sbi, Ge Capital Aim At Issuing 2 M Credit Cards

State Bank of India and GE Capital plan to issue about two million credit cards in the next three years. This is almost equal to the total number of cards issued by all the other players currently. The cards are expected to be launched by July 1, 1998.

The card will be branded as an SBI card and GE Capital will only provide the backroom services. SBI is in an advanced stage of discussions with VISA International for the issue of a franchise card. SBI will also issue a proprietary card. GE Cap will also offer its services to others.

 

SBI and GE Capital signed a joint venture agreement yesterday to commence the payment card business in India. As published in Business Standard earlier, the joint venture will have two companies: one for marketing and distribution and the other for technology and processing, at a total investment of Rs 150 crore.

The marketing company, SBI Cards & Payment Services Ltd (SBICPSL) will focus on marketing and distribution of SBI cards. SBI and GE will hold 60 per cent and 40 per cent, respectively, in the proposed joint venture.

The technology and processing company GE Capital Business Processes Management Services Ltd (GECBPMSL) will handle the technology and processing needs of the payment card business in India. GE Capital and SBI will hold 60 per cent and 40 per cent, respectively, of the proposed equity capital in the JV.

The marketing company will have an equity capital of Rs 100 crore and processing company will have a capital of Rs 50 crore.

SBI chairman M S Verma stated that the credit card market is expected to increase to about six million cards by 2001. Speaking to reporters later, he mentioned that SBI was aiming at issuing at least two million cards by 2001. He feels that with the existing database of 17 million account holders, it will be easy to reach the 2 million cardholder-base very soon.

Addressing a press conference, Verma said that the aim of the venture is to tap markets that have not been reached so far and provide products through the cards that have not yet been offered.

Pramod Bhasin, president, GE Capital India stated that the processing company will also sell its services to other companies.

SBI plans to issue different types of cards which also include charge cards, stored value cards, smart cards, etc. It will issue cards to individuals and corporates. The USP of SBI will be reach, technology and coverage.