SBI Card issuances decline

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BUSINESS LINE

SBI Card issuances decline

2008-11-04 11:03:09

VISA

Mumbai: Credit card major SBI Cards & Payments Services Pvt Ltd (SBI Card) on Monday said its card issuance has come down to nearly a third of its peak monthly issuance of one lakh cards, reflecting the general downturn in the economy.

The non-banking finance company, which is a joint venture between the State Bank of India (SBI) and GE Money, has a credit card base of over three million.

According to Diwakar Gupta, CEO, SBI Card, the delinquency level for the industry averaged around 15 per cent and SBI Cards portfolio mirrored this trend. Outstanding credit of SBI Card is around Rs 2,000 crore.

“We are seeking to build a quality portfolio. We are reaching out to card holders, who are having a good track record but are facing repayment difficulties due to the current economic downturn, with restructuring packages, which includes a softer Equated Monthly Instalment option,” said Gupta on the sidelines of the launch of the ‘SBI Dena Bank Card’.

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Delinquencies

The company, which suffered a loss of Rs 150 crore in 2007-08, has been swift in dealing with delinquencies, he added.

With the cost of funds going up to 14 per cent from the earlier nine per cent levels, the card company recently upped the interest rate charged on outstanding credit rollover from 3.1 per cent to 3.35 per cent per month.

Capital infusion

Depending on the business requirement, SBI Card may require capital infusion next year, the CEO said, and added that the company’s current capital adequacy ratio was over 11 per cent as against the regulatory minimum of 10 per cent.

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Feature-rich

Earlier, speaking at the SBI Dena Bank Card launch, Bhaskar Sen, Executive Director, Dena Bank, said the new credit card was a feature-rich and trustworthy offering for Dena Bank customers.