The Hindu Business Line : BoB charts Rs 80-cr plan for cards arm

BANK of Baroda plans to hike the paid-up capital of its wholly owned card subsidiary BoBCards Ltd to Rs 100 crore, from its current level of Rs 20 crore, to finance the company's growth strategy in a competitive environment.

"The BoB board is expected to approve the proposal and we hope to increase the capital from Rs 20 crore to Rs 100 crore over the next couple of months," said Mr P. S. Shenoy, Chairman and Managing Director, Bank of Baroda, at a press conference here on Wednesday. The capital infusion will help the company build confidence among customers and also help the subsidiary to give more revolving credit, he added.

BoBCards has also slashed its service charge to 1.99 per cent from 2.25 per cent effective from October 1, 2004, which is to be further reduced to 1.49 per cent for quality card holders from April next year.

Mr Shenoy said that in order to increase its card base, BoBCards would issue free credit cards to the bank's fixed deposit holders of Rs 25,000 and above.

BoBCards plans to launch an international dollar card by the end of this fiscal, in association with either MasterCard or Visa, he said. Commenting on the delinquency rates on the company's cards, Mr Shenoy said, it was between 8-10 per cent, well below the industry average of 30 per cent.

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BoB charts Rs 80-cr plan for cards arm