Corporation Bank to launch credit card

Corporation Bank will launch its own credit card in May, six months after forging a strategic alliance with Oriental Bank of Commerce and Indian Bank for joint business forays, including credit card.

With the joint credit card service expected to take at least another nine months to get off the ground, Corporation Bank has decided not to delay its credit card foray any longer.

The three public sector banks had signed a memorandum of understanding (MoU) for alliance in November.

"This does not run contrary to the MoU. Since the joint venture will take longer than expected, we have decided to launch our card while concurrently working on the joint effort," said B Sambamurthy, chairman and managing director, Corporation Bank.

Corporation Bank will formally launch its credit card on May 19. While back-end processes will be outsourced, marketing and credit approval will be done by the bank. Another alliance partner, Indian Bank, already has its own credit card service.

"This will not come in the way of launching a joint venture and will give us the feel of business," Sambamurthy said.

For the joint service, the bank troika plans to float a non-banking financial company (NBFC) and rope in a foreign partner for which regulatory clearances are required. This is expected to take at least another nine months.

In March, one of the alliance partners, OBC, decided to go ahead with Canara Bank and HSBC Insurance (Asia Pacific) Holdings for a joint life insurance venture. Corporation Bank has a tie-up with Life Insurance Corporation (LIC), which holds a 26 per cent stake in the bank, for distributing its products.

The other broad areas covered by the MoU include joint forays into capital market and other financial ventures.

The alliance has already syndicated Rs 1,290 crore of loans through its business syndication cells in Mumbai, Delhi and Chennai.

The banks are in the process of sharing their ATM network, surplus cash, currency chests and training infrastructure. The alliance has also identified 50 branches from each of the three banks for cheque collection and demand draft payment.