SBI set to oust Citibank from No 2 credit card issuer slot

SBI Cards, State Bank of India's credit card subsidiary, is closing in on Citibank and hopes to surpass the foreign bank to occupy the number two position in terms of issuing credit cards in the next two-three months.

Growing aggressively since the beginning of 2005, SBI Cards has reached a credit cards base of 2.5 million from 1.3 million at the end of 2004.

Citibank currently has a credit cards base of 2.85 million, up from 2.2 million at the end of 2004. ICICI Bank is way ahead at the top with 4.6 million credit cards.

"We will overtake Citibank in the next two-three months to become the second-largest credit cards issuer," T S Bhattacharya, managing director of SBI, said.

SBI has been issuing an average of 1.15 lakh credit cards a month since January 2006. The country's largest banking entity targets issuance of nearly two lakh credit cards every month, and its recent tie-up with the Tata group for a white label credit card should help it reach that target.

The credit cards base in the country has been increasing at more than 30 per cent in the last few years. Industry analysts expect the growth in 2006 to be over 40 per cent.

SBI officials said the cards that the bank has issued also have a very high average spend. The average card spend on SBI Cards is over Rs 24,000 against the industry average of Rs 20,000.

Bhattacharya said SBI Cards will also expand its presence to 100 cities from the current 42 cities in one year. In the debit card segment too, the banking major is racing ahead. Its debit cards base has increased to 20 million from 5.5 million at the beginning of 2005. The bank seeks to shift people from indulging in cash transactions to using plastic.

Its recent campaign, designed by Mudra Communications, is aimed at pushing more people across the country towards using debit cards for purchase transactions "" not restricting to just cash withdrawals. The bank is spending Rs 3 crore on print advertising and another Rs 1.85 crore for television ad, a year.