sbi cardThe bank’s credit card operations finally turned in a profit after many years of losses. The credit card business (run as a joint venture with GE Capital) provided it a profit of Rs 7.10 crore last year compared to losses of Rs 153 crore in the previous fiscal and Rs 185 crore in 2008-09.The bank said its customer spends had increased 30 per cent to Rs 6,452 crore. Total customer spends of all credit card customers in the country during the last fiscal was around Rs 75,000 croreThe last two years have been a period of consolidation for the credit card industry after witnessing a period of high growth in the preceding decade.
But high delinquency of borrowers and poor recovery mechanisms, compounded by poor underwriting of business by various banks and cut-throat competition contributed to great turmoil in the card industry. Delinquency rates were reportedly in the range of 20 per cent plusBanks have again become active in the credit card space as growth outlook for the Indian economy is bright. Since Barclays has decided to sell its performing portfolio, it minimises the default risk. Institutions that bid for Deutsche Bank’s cards business but were not successful would be interested. They may not mind paying a little premium,” said an analyst with a domestic brokerage.Over the past two years, the top card issuers have trimmed their operations and culled out cards that were creating problems.
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