Financial Daily from THE HINDU group of publications
Tuesday, Sep 20, 2005
Financial Daily from THE HINDU group of publications Tuesday, Sep 20, 2005 |
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Money & Banking
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Credit Cards & Debit Cards Bobcards plans to add more clients, centres this fiscal Our Bureau
Mr S.P. Garg
Mumbai , Sept. 19 BOBCARDS Ltd, the wholly owned subsidiary of Bank of Baroda, is planning to add more customers and widen its merchant establishment base. Bobcards has set a target of 10 additional centres all over the country by the end of this fiscal, said Mr S.P. Garg, Managing Director, Bobcards. Currently, it has 40 centres and a customer base of 8.5 lakh. Mr Garg said, "We are offering free cards to customers who hold fixed deposits in BoB and also to the bank's high net worth individuals." Bobcards has also launched special Woman Card and Youth Card, for non-BoB customers. Other expansion plans include penetration into tier-I and tier-II cities, which will be done through road shows in these cities in association with BoB's semi-urban branches. The company also plans to increase its tie-ups with merchant establishments from the current 25,000 merchant establishments to 30,000 by the end of 2005-06 About the relatively small customer base, Mr Garg said, "We don't give unsolicited cards like many other banks. That is why perhaps we have fewer cardholders." The rate of default for Bobcards, at 10 per cent, is lesser than the industry average of 12-15 per cent, thanks to an effective recovery mechanism, said Mr Garg. Bobcards has a capital base of Rs 100 crore. In 2004-05, the company had an operating profit of Rs 10 crore, up from around Rs 8.4 crore in 2003-04. Net profit for 2004-05 was Rs 5 crore. "This year the profit would be under some strain because of the waiver of annual fee on the credit cards. "But we hope to compensate it with volume and efficient recovery margin," Mr Garg said. Among other launches planned are `affinity cards', wherein Bobcards would tie-up with a social or cultural organization and a possible tie-up with matrimonial websites for free cards for those who get married through the website, Mr Garg said.
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