4 in race to partner PNB credit card business

BankAm, ANZ, Barclays, ICICI Bank are the majors vying for alliance.

Punjab National Bank (PNB), the country's second largest public sector lender, has shortlisted Bank of America, Australia's ANZ, Barclays of the UK and ICICI Bank, India's second largest bank, to float a credit card joint venture. PNB plans to partner one of them in the venture.

The bank has also shortlisted a couple of software companies, such as the Mumbai-based VIGL, in case a third partner has to be roped in.

The bank has sought request for proposal (RFP) from the four and is likely to finalise the partnership in two months, a senior PNB official told Business Standard.

If PNB goes for a single partner, then it will select one of the banks that has better credit card expertise and technological capability for appraising and issuing bills, collections and marketing. In case of a three-way partnership, an IT company will be roped in order to provide software support.

PNB is likely to hold majority stake in the venture, which may be set up with an initial paid-up capital of Rs 100 crore. The non-banking finance company will have its own offices across the country, with focus on tier-I and II cities.

The company will leverage on the 37-million customer base and 4,500 branches of PNB to grow its business. The domestic credit card industry is growing by over 30 per cent year-on-year and there is enough room for everyone to grow, the official said.