SBI to restructure its credit card portfolio
By Ankit Sharma
Nov 6, 2008
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Due to the global downturn in the economy, Credit card major SBI Card has been facing a decline in its credit card issuance. The major reason for the fall is the rise in the number of defaults in the segment.

However the delinquency rate is likely to hold on in the coming months as the company is restructuring its card-portfolio. Through this move SBI Card plans to reach out to those customers who have had a good past record but are unable to repay due to the crisis.

Diwakar Gupta, CEO, SBI Card said, “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 Installment option.”

In order to help the customers, company may increase loan tenure along with revising the interest rates, added Mr. Gupta. Currently SBI is charging interest rate that hover between 3.1% and 3.35% per month but it may revise them down to 2.5%. The company is taking this move with a view to check the number of defaults.

SBI has recently tied up with Dena Bank to launch a co-branded credit card to enhance the services provided by SBI Card. The company aims to provide more efficient banking services and therefore wants to benefit from the services extended by professional organizations, said Bhaskar Sen, Executive Director of SBI Cards.

SBI Cards & Payments Services Pvt Ltd (SBI Card) which is a joint venture between the State Bank of India (SBI) and GE Money has a credit card base of over three million customers.

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