SBI Cards to Launch Credit Cards for Lower Strata People

SBI Cards is going to launch a credit card with a cap of Rs. 25,000 for those section of people who can afford to pay but don’t have cards.
Vijay Jasuja, SBI Cards & Payment Services (SBI Cards) informed that the card is for the lower strata of society who do not possess credit worthiness to get card, but each of their bank account has some money. Hence, they can give them secured card, even if they don’t have any credit history. So, card with a limit of Rs. 25,000 against the security of bank deposit can be given to anyone.

These people have cash to spend, but the problem is they don’t have cards to use, Jasuja said. SBI Cards is going to offer them secured cards in two-three months. After government’s decision to ban the old banknotes of Rs. 500 and Rs. 1,000, SBI Cards has faced a surge in card usage and anticipates to add 20-25 per cent more customers.

Since this demonetization drive, there is a rise in the usage of cards both in terms of number of transactions and volume. The plan was to grow by 9,00,000 to 1,00,000 cards in one year but with this change, it will be extra by at least 20-25 per cent new set of customers.

He further added that the company has made card acquisition process easier and has planned to reduce the income cut-off criteria for giving credit cards to potential customers. Even Jan Dhan account holders can be potential customers. SBI Cards is also in the process of speeding up customer acquisition process by reducing the delivery period so that more and more people are added to the network.

As of now, the delivery time is 9-11 days, what they are doing is that they are trying to reduce it to 2-3 days, that is the minimum. The company will also deploy more people on the field who will be present in all strategic markets and malls so that if anyone wants a card, the team can talk to such people, accept their application, document and quicken the period of processing and delivery.

There will be major shift in consumers’ spending behaviour. The kind of people who use credit cards are already using cards, but may be, they spend 2 per cent by card and 80 per cent by cash. That component will shift. Now, they will spend 90 per cent on card and 10 per cent in cash. As the markets opened on Monday, SBI share price is trading above 0.17 per cent at Rs. 267.10. The stock opened at Rs. 268.90 against its previous close at Rs. 266.65.