Financial Daily from THE HINDU group of publications
Sunday, Apr 03, 2005
Financial Daily from THE HINDU group of publications Sunday, Apr 03, 2005 |
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Money & Banking
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Credit Cards & Debit Cards Co-branded credit card — Andhra Bank set to form alliance with Air Sahara C.R. Sukumar
Hyderabad , April 2 ANDHRA Bank is set to forge an alliance with Sahara airline major for a co-branded credit card. The bank Chairman and Managing Director, Mr T.S. Narayanasami, told Business Line that the bank was currently at an advanced stage of finalising the modalities. The move is expected to result in Andhra Bank credit card division recording a significant business since co-branded credit cards typically register nearly five times higher billing than a traditional plastic card as per the industry estimates. The higher billing is attributed mainly to the customers' tendency to consolidate all their spending on single card so that they can accumulate further points for future conversion into miles and free passage. According to Mr Narayanasami, co-branded credit cards with airlines have been very successful world over. It works out as win-win situation for both the parties — the airline service provider and the credit card issuer. "We are giving final touches to the co-branded card for Air Sahara to offer attractive features so that it benefits both the partners. These features include free passages from redemption of miles, discounts on tickets, upgradation of vouchers for business class and lounge access," he said. Andhra Bank is said to have initiated steps to install EDC machines at all the Air Sahara outlets spread across the country. This would enable it to acquire significant business of Air Sahara. Meanwhile, the credit card division of Andhra Bank has recorded highest operating profit among the credit card issuers. According to Mr Narayanasami, the bank's card business has turned the most profitable with an operating profit of Rs 25.45 crore on a 1.53-lakh cards base for the fiscal ended March 2005. This is in comparison with State Bank of India Cards' operating profit of over Rs 50 crore for 2003-04 with 14-lakh cards base.
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