Mumbai: State Bank of India has said that it will offer credit cards to every account holder who has a balance of Rs 20,000-25,000, without going into credit history.
This is the first major joint collaboration between SBI and SBI Card after the bank hiked its stake in the joint venture to 74% by buying out part of its partner GE Capital’s stake for Rs 1,168 crore. GE Capital will sell its remaining stake to a private equity investor in coming days.
In an attempt to encourage adoption of credit cards and facilitate expansion in the reach of digital payments, SBI Card “Unnati” will be offered free, at zero annual fee, for four years. “Presently, lack of credit history has been a challenge in increasing the card penetration in the country. In such a scenario, this card is likely to facilitate in generation of credit history for new users, which will help bringing them into organised financial stream,” said Bhattacharya
“SBI has close to 30 crore customer accounts, including Jan Dhan Yojana. Post-demonetisation the balance amount in these accounts increased significantly. Many customers do not have credit history and are not eligible for cards. We want to bring about financial inclusion in terms of credit facility with this new product,” said Vijay Jasuja, CEO, SBI Cards.
According to Jasuja, over 20,000 branches of the SBI group, which include associate banks that will merge with the PSU major from April 1, will offer cards to customers. Even if 5% of SBI customers acquire a card, this will grow the number of customers by 1.5 crore, which is more than three times the present credit cardholder base. Jasuja said that the bank branch will not do any underwriting except for verifying the balance amount in the customer’s bank account. The credit limit would vary according to customer and would be revised in keeping with the track record.
Cardholders will be entitled to a slew of benefits, including fuel surcharge waiver across petrol pumps in India, 1 reward point earning for every Rs 100 spent and the option to redeem reward points for gifts.