State Bank of India has announced that it will offer credit cards to each account holder with Rs 20,000- 25,000. ‘SBI card unnati’ to issue credit cards without going into credit history. SBI on Tuesday said its stake in SBI Card will increase to 74 percent by June end.
The SBI board has already got approved for a hike in the bank’s stake in its two credit card joint ventures with GE. SBI has the approval to infuse Rs 1,160 crore in the two joint ventures – GE Capital Business Processes Management Services Ltd and SBI Cards and Payment Services Pvt Ltd.
“There are a few regulatory issues that are being sorted out. Within the next one month there should be finality on the remaining stake sale,” says, SBI Chairman, Arundhati Bhattacharya at the launch of SBI Card Unnati in New Delhi.
SBI currently holds 40 percent in GE Capital Business Processes Management and 60 percent stake in SBI Card. The balance in both ventures is held by GE Capital.
The bank made its debut in credit card business in 1998 by collaborating with GE Capital India. GE Capital India was a consumer finance arm of US-based GE Capital then. As per the agreement between GE Capital and SBI back then, the decision to exit the JV must be made under mutual understanding.
SBI Card Unnati targets all SBI customers, including Jan Dhan account holders across the country. The credit cards will be issued through a network of 20,000 plus SBI branches for account holders with Rs 25,000. SBI expects 300 percent growth within a year with this move.
“To encourage adoption of credit cards and facilitate expansion in the reach of digital payments, the SBI Card Unnati will be offered free, at zero annual fees, for four years,” says, Arundhati Bhattacharya.