The Hindu Business Line : Bank of India to revamp credit cards business

Mumbai, Aug. 21 Bank of India is looking at revamping its credit card business and is considering the options of having it either in-house or floating a subsidiary or roping in another bank to enhance its business from this segment.

The bank’s credit card base currently is about 7 lakhs.

“We will take a decision on this by the end of this year,” said Mr T. S. Narayanasami, Chairman and Managing Director. The bank has appointed KPMG as the consultant to conduct a study on the same.

“While expanding the credit card base, we have to be careful on a couple of parameters in order to avoid bad loans,” said Mr Narayanasami.

The bank is, however, currently concentrating on its debit card segment by offering special incentives to its customers by way of free health insurance mediclaim policy for Rs 2 lakh.

Customers using the debit cards for purchases of Rs 2 lakh per annum will qualify for the facility.

In order to boost its entire business mix, the bank is concentrating on the management of its non-performing assets (NPA) and augmenting fee-based income and resource position by focusing on low cost current account and savings account (CASA) and term deposits.

The bank is planning to triple its fee-based income by selling third party products. At present, its fee-based income is at about Rs 50 crore.

It is also looking at offering wealth management services to high net-worth customers.

“We are planning to send some people for training in this field and we are hopeful of offering the service at select centres in three months time,” said Mr Narayanasami.

The bank is also offering a host of insurance products such as free air travel accident insurance cover up to Rs 5 lakhs to all savings bank ‘diamond customers’ (customers having a average quarterly balance of Rs one lakh in their savings bank account) and free personal accident insurance cover to all home loan borrowers, credit card holders and agricultural borrowers. It is also offering family floater mediclaim health policy covering the family as a unit at reduced premium rates and life and accident insurance cover to all deposit customers at cheap rates.

The strategies adopted by the bank for its domestic operations include segmentation in order to enable focussed approach towards niche areas and avoid dissipation of effort.

The branches have been segmented as resource, profit, priority sector and general banking centres.

More Stories on : Credit Cards & Debit Cards | Strategy | Public Sector Banks

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