Shriram arm floats credit card

Shriram Transport Finance Company Ltd (STFCL), in association with UTI Bank, has launched a co-branded credit card exclusively for small-truck owners.

The card offers a credit limit of Rs 15,000 and they can withdraw up to Rs 5,000. The card will be officially launched by Finance Minister P Chidambaram on January 6.

"Our target is to issue one lakh credit cards in one year. Depending on the success, we will further look into tie-ups with petroleum companies and others to provide additional facilities to truck drivers. We have taken an initiative to target the sub-prime category as we believe that the credit risk is less but this requires proper identification of customers, pricing and collection machinery," said J P Nayak, chairman and managing director, UTI Bank.

Lending through credit card would prove beneficial as transactions are recorded and leave an audit trail, he said. Truck owners are entitled to one loyalty point for every Rs 100 they spend using the card.

They can use the card for day-to-day capital requirements, including buying fuel, tyres and oil, and can also withdraw money from ATMs. UTI Bank has around 2,100 ATM centres across the country.

The card offers in-built insurance schemes under four categories - personal accident cover of Rs 3 lakh, lost card liability of Rs 40,000, credit shield and purchase protection, each of Rs 25,000.

R Sridharan, managing director, STFCL, said at the launch, "The current base is Rs 9,000 and our aim is to increase it to Rs 15,000-20,000 crore in the next four to five years. The launch of this card is a unique step and we assure UTI Bank that the devolvement rate is limited to 15-20 per cent."