Barclays plans credit card foray

Barclays Plc, UK's third-largest bank by assets, plans to enter the emerging credit card market in India.

The bank is in talks with Life Insurance Corporation of India to use the latter's huge database on royalty payment.

Barclaycard is the single biggest branded credit card operation in Britain, with 11.2 million card holders and about £25 billion lent out at any one time.

However, it is not clear whether LIC, which has plans to enter the credit card business, will provide its database to the foreign company.

If the talks with LIC did not materialise, Barclays would go ahead on its own, said sources close to the development.

When contacted, the Barclays spokesperson said the bank did not wish to comment. An LIC executive said it had been approached by many players. "It is too early to comment on a possible tie-up with Barclays," he added.

Industry sources said the proposed entry would provide Barclays, which was facing problems in the UK, an opportunity to tap the growing Indian credit card market, estimated to be around $6 billion a year.

ICICI Bank tops the list of credit card issuers with 6 million credit cards while State Bank of India comes second with 3 million. Citibank is a close third.

Barclaycard expects its army of customers to default on an unprecedented £1.5 billion (nearly Rs 13,000 crore) of debt this year.