IndusInd Bank may enter credit cards, personal loans

IndusInd Bank is contemplating an entry into credit cards and personal loans in the next financial year, according to a senior executive.

“We see good potential in these segments and are considering introducing these products in 2010-11,” said SV Parthasarthy, head of consumer finance at the private sector bank. The lender used to offer personal loans till 2005-06 but stopped due to high delinquencies.

Due to the slowdown, most banks were left with large bad loans in credit card and personal loan segments.

To keep delinquencies in check, bankers have adopted a strategy of targeting customers who already have a relationship with the bank. IndusInd plans to follow the same path. “We are looking to tap our existing customer base,” said Parthasarthy.

“A lot of mistakes have been made but there will possibly be a time when banks are bullish on this segment again. Banks have improved their customer screening processes and with the advent of CIBIL (credit information bureau), they now have more information on potential customers,” he added.

According to IndusInd Bank Managing Director and CEO Romesh Sobti, the lender plans to expand its retail loan book by 20 per cent in the current financial year. These account for 40 per cent of the bank’s Rs 19,090-crore loan book. IndusInd Bank is a significant player in the vehicle loans space. Loans for commercial vehicles account for 19 per cent of its loan book while other vehicle loans account for about 13 per cent.