Titans in plastic push
Read more below
- Published 6.09.07
Mumbai, Sept. 6: GE Money India — a subsidiary of one of the world’s largest credit services company — and the Life Insurance Corporation are tying up to launch a new credit card outfit.
Corporation Bank and two LIC subsidiaries — LIC Housing Finance Ltd and LIC Mutual Fund — will be partners in the venture for which definitive agreements are expected to be signed by the end of October.
The LIC today signed a memorandum of understanding with GE Money India, Corporation Bank, LIC Housing Finance Ltd and LIC Mutual Fund AMC to create the new credit card company.
The LIC will hold a 40 per cent stake in the venture and GE Money India will have 35 per cent. The rest will be divided among the other partners.
GE Money is one of the world’s leading credit card issuers with more than 100 million cards in force in 37 countries. The venture will leverage the LIC and Corporation Bank’s strong brand and extensive branch, ATM, and sales distribution network.
It will draw on GE Money’s global and local expertise in credit cards, business management processes, and technology-driven platforms.
Bankers note that though the alliance consists of strong partners, it is a late entrant in this fiercely competitive industry.
ICICI Bank is the largest player in this sector and has more than 8 million card holders. Next in the pecking order is SBI Cards with around 3.5 million card holders. Interestingly, GE Money is also a partner of the State Bank of India (SBI) in the credit card venture. It could not be immediately ascertained whether GE Money will continue with both the alliances. Officials of the SBI and GE Money could not be reached for comments.
LIC chairman T.S Vijayan said, “We are excited to be taking our company to the next phase of growth with this new strategic joint venture.”
Vishal Pandit, CEO of GE Money’s India operations, said while the credit card market in India offered significant opportunity for growth, the company was looking to leverage its expertise in consumer financial services to help this partnership become a strong cards player in India.