Federal Bank is set to launch credit cards in coming months and remains bullish about growth opportunities on the retail portfolio.

“We are in the process of getting into credit cards. In a couple of months from now, we will be there,” said Shalini Warrier, Executive Director, Federal Bank.

The bank has tied up with Mastercard and will initially start issuances for its own customers. It has also tied up with Fiserv to enable the digitisation of the end-to-end card issuance and processing cycle.

“We have a very good customer base. Once we have made enough inroads into our existing customers, at some point we will start new to bank business,” Warrier told BusinessLine, adding that between personal loans and credit cards, the portfolio will grow and that will help contribute to the return on assets.

Noting that the bank offers personal loans only to existing customers, Warrier said the portfolio is small and it will never be a very big portion. “But clearly, there is a need to increase that a little bit,” she said.

Personal loans is at about ₹1,800 crore for the bank.

Meanwhile, Warrier is also very optimistic about the retail portfolio and said the momentum for credit demand continues.

“Our momentum is higher than January 2020. It was higher in January 2021, and is continuing in February,” she said, adding that there is a high level of confidence in the market.

The bank expects the retail portfolio to grow at about 13 per cent to 15 per cent.

Federal Bank’s retail advances grew by 16 per cent in the third quarter of the fiscal and contributes 54 per cent of the loan book, as against 46 per cent from the wholesale business.

Inward remittances

According to Warrier, the lender’s inward remittance business has also grown despite the pandemic.

“The reason why we have not seen a decline in our remittance business was because we've been gaining market share. The overall pool may have come down a little bit, the fact remains that our pool has actually been increasing,” she said.

As on December 31, 2020, the banks market share in personal inward remittance business increased to 17.5 per cent. It has also processed over $ 1 trillion inward remittances processed in calendar year 2020.