Non-resident Indians (NRIs) will no longer need to pay in dollars when they settle bills for credit cards used in India. The State Bank of India (SBI) is planning to come out with a novel 'secure' card through its subsidiary SBI Cards & Payment Services Pvt Ltd, a joint venture with GE Capital.
NRIs will be offered a credit card by the bank which can be used during visits to India. The Secure Card, as it has been christened, can be obtained from SBI Cards against NRI balances with the parent bank.
NRIs usually make short trips to the country. While travelling within India, they make use of their global credit cards, where repayment is made in dollars. This is even as their rupee savings in non-resident ordinary (NRO) and non-resident external (NRE) accounts lie idle.
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Said SBI officials: "We will inform SBI Cards to issue the card to an NRI, after he gives us a lien on the deposit, either savings account or fixed deposits".
The Reserve Bank of India (RBI) has informed SBI that such a novel product can be offered to NRIs, but has stipulated that the card is valid only within India and Nepal.
Further, the regulator added that the credit card bill payment has to be through funds from the NRO/NRE accounts and cannot be directly remitted to the card-issuing company.
"As the card company is a separate outfit, it cannot have any direct access to NRO/NRE accounts. The sharing of charges and other modalities are under discussions," said SBI officials. All credits into NRO/NRE accounts are monitored. If NRIs directly remit through drafts to the card company, there could be an issue, they added.
SBI, however, will not give NRIs the option of revolving credit. "An NRI does not need revolving credit as he can also use his global credit cards. Basically, he is looking for the convenience of credit cards, where he can pay the local bills in rupee currency."
NRIs are always conscious of having to part with their foreign exchange when they are visiting the country, considering the rate at which the rupee is depreciating. With this secure card product, NRIs will be able to avail of credit during their stay from any credit card merchandise outfits or SBI's ATM network.
The secure card concept has already been introduced in New Delhi as a pilot project. However, it has been limited to resident Indians.