Commercial Cards Spread To India

by Mercator Advisory Group 0

SBI Cards, a joint venture between the State Bank of India’s card company and the GE Capital Business Processes Management Services, has announced its intention to expand its card portfolio from retail to commercial. It already has begun to offer a corporate credit card, as well as a charge card for small and medium-sized enterprises.

SBI Cards’ chief executive officer, Kadambi Narahari, announced in New Delhi that SBI Cards also is planning to offer corporate cards to small and medium enterprises, a segment often considered by lenders as riskier and less stable than mid-corporates and large companies. He also indicated that:

“To secure itself against any defaults on corporate cards issued to SMEs, SBI Cards is in talks with SBI for an innovative arrangement. SBI has been asked to see if it could allocate to SBI Cards a portion of the overall cash credit limit already granted to the SME.”

While GE Capital is certainly competent to meet the business processing requirements of such a commercial card portfolio, it will interesting to see if the State Bank of India is willing to take on the risk of card exposures.

Click here to read more from the Hindu Business Line.