StanChart ups ante in credit card market

Standard Chartered Bank today launched a credit card, offering life-time 5 per cent cash back on all fuel purchases and payment of telecom bills and also 1 per cent cash back on all other purchases.

Standard Chartered Bank said the cash back on its "Super Value Titanium MasterCard Credit Card" would be subject to a maximum of Rs 6,000 per annum.

The credit card holders will have to pay an annual fee of Rs 750 and can enjoy free airport lounge access at all Clipper lounges across the country.

Murli Natrajan, head consumer banking, India & Nepal, at Standard Chartered Bank, said: "The card is targeted at the mass affluent segment that spends Rs 2,500- Rs 3,000 per month on fuel and telecom. This segment is growing at 25-30 per cent per annum."

A research by Standard Chartered Bank showed that fuel and telecom constitute one-third of credit card usage among active subscribers in India. MasterCard has collaborated with Standard Chartered bank in the development and the launch of the card.

Subroto Som, global product head credit cards and personal loans at Standard Chartered, said "Credit cards and personal loans are significant contributors to consumer banking business. The credit cards base is estimated to grow to 40-45 million from the current 10-15 million cards by 2010 with the credit information bureau in place."

The bank is expecting as many as 30,000 customers to opt for the new card in the next few months. The bank would initially start with 8 cities and will eventually launch cards to other cities.

Standard Chartered has issued around 1.7 million credit cards, of which about 20 per cent are inactive against the industry average of 30-40 per cent.

Neeraj Swaroop, CEO-India at Standard Chartered, said: "Cards in India are relatively new and is still in nascent stage."

As regards home loans, Natarajan said the bank has slowed down growth in its mortgage loans disbursement by 30-35 per cent because of a squeeze in margins with rising cost of funds.