Standard Chartered Bank (StanChart) may emulate its Sapnay programme - a credit card targeting public sector and government employees - in other southeast Asian countries.
"After testing the product in India, there could be similar card products in countries which are in the evolution of credit card cycle -Thailand and the Philippines," StanChart's global product head -credit cards and personal loans, John Lorimer, said.
Sapnay has been selected as one of the best overall marketing programmes in the Asia Pacific region as part of the 2001 MasterCard Asia Pacific marketing awards. It has also won the MasterCard International award for excellence in product innovation in South Asia.
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The Sapnay programme was launched in February 2001. According to Standard Chartered Bank's general manager and chief executive Harpal Dugal, Sapnay has been targeted at a particular segment of the market. "We have got over 50,000 applications over and above our card base," he said.
Adds StanChart's head credit cards and personal loans (India) Srinivasan Shyam: "It has been launched in Mumbai and Chennai. We will launch it in other cities by the end of the quarter. The response for the card has been quite good."
The card, targeted at the employees with an income of around Rs 60,000- Rs 1.5 lakh per annum, and has other facilities like insta-buys where customers can purchase products at zero installments. "No interest is being charged on these purchases as we have tied up with various producers," Shyam said.
Lorimer said the overall growth for credit cards in the country is at around 30 to 40 per cent. India has a booming middle class and also a very low penetration of cards.
On the recent 5 per cent service tax on credit cards, Dugal said: "The consumer spends in India through the credit cards is only one per cent of the total spends compared to the 18 to 20 per cent in western countries. The tax is only a short-term product. We recognise the government needs to raise revenue. However ,it has to be a win-win situation for all the parties concerned. An increase in card penetration will help the government get more revenues as all the sales will be through invoices thus bringing in more taxes."
Adds MasterCard International vice-president and country manager South Asia Sameer Vakil: "We are in constant touch with the government on the issue. The efforts are being made by all the banks together jointly with the Indian Banks Association (IBA). The government and the card issuers have to have to find ways of increasing the tax revenue. The solution does not lie in having a service tax on the finance charges too. There could be an initial dip in the spends in the first 3-4 months as the service tax may be passed on to the customers."