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SBI to increase its credit card business

The State Bank of India has said it is back to growing its credit card business after shrinking its card base by 16% and turning around the business. The bank is now targetting the upper-middle class with a Platinum Card that offers a wide range of benefits and has a low-entry barrier.

SBI Card, a 60:40 JV between SBI and GE Capital, was expected to turn around by March 2011 but has managed to turn in a profit in the quarter ended September 2010. The cards company had reported a loss of Rs 321 crore for 2008-09, which included a deferred tax asset write-off of Rs 135 crore on a total income of Rs 757 crore.

Despite the losses, SBI Cards’ pullback has been the least and it has been the fastest to rebound to the growth mode. “The whole industry had seen a 33% drop in the number of cards from 27-28 million to 18 million. Against this, the number for SBI Cards has come down from 3.1 million at its peak level in 2008 to around 2.6 million now,” said State Bank of India chairman OP Bhatt. The bank now plans to issue at least 40,000 cards every month.

But the key difference is that unlike in the past, when cards were sold by marketing agents at petrol pumps, they are now being sold largely to customers at bank branches.

The bank now aims to increase its customers in the high net worth segment, which is more profitable as it is more high-spending and less prone to defaults. The company plans to increase its customer base in the high net worth segment from 5% to over 50%. To achieve this goal, it’s offering a host of benefits with the Platinum Card. These include 10 cash points for every. 100 spent and up to three Kingfisher Airline return air tickets every year.

According to SBI Cards CEO Abhay Kumar Singh, the company has learnt from the industry’s excesses of 2007-08. “There is no mad rush for land grab or market share,” he said, adding that prudent decisions on issuing cards have helped bring down loan losses to single-digit levels.

“Acquiring customers through SBI online branches helps us know the customer far more than we can otherwise. That gives SBI Cards a better understanding of the customer preferences as well as helps us plan the product mix and customer value proposition,” said GE Capital president and CEO Anish Shah.

Mr Bhatt said he expects the central bank to maintain status quo or at best raise rates by 25 basis points in its half-yearly review of its monetary policy. He added that the central bank has a tough choice because even without RBI action, there was tightness in the money markets, but at the same time, inflation had not come down to comfortable levels.

Mr Bhatt said the year-on-year growth in credit for SBI was around 18% and scaling up advances to achieve 20%-plus levels would be tough. Although money markets were witnessing a shortfall in liquidity, the SBI chairman said the bank was comfortably placed. “There was a time when there was a shortage of liquidity. From there, we moved to a position when there was a liquidity overhang. Today, we are in a position where we are just right in terms of liquidity,” he said. He added that any decision on reviewing its lending rates would be based on how their costs of funds move.

SBI, which raised $ 1 billion through an issue of medium-term notes in the second quarter, is now looking at a fresh issue before the end of the year. Mr Bhatt said the bank has not yet finalised the size of its issue, but it was likely to be smaller than the $ 1-billion offering.

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How to Get a Good Credit Card Machine

The use of credit card machine is really important because there are many transactions that can be done with this card. The presence of this card is really famous because it is the most important thing you must have when you would like to purchase online. In this case, having a credit card machine will make you look more professional so you will be able to get quick access to revenue. Thus, it is important for you to find the good machine for your needs so you can get the best help that is functional for you.

1.  Searching online is the first thing you need to perform because there are many websites available that offer you with the machine. In this case, you can type “credit card machine” or “merchant account” to find the machine that will fulfill your needs. After getting some selections for your needs, it is important for you to check the review provided so you will be sure that you find the one needed.
2.  Then, it is important for you to compare the prices offered. The price will vary so you must be sure that you get the best one that is suitable with the budget you have. Also, it is crucial for you to know your personal needs so you will not make any mistake that can make you feel sorry and you must be careful in finding the best one for you.
3.  Also, you must be sure to choose the right machine that has good capabilities as your willingness. It means that you must check the features out to make you sure that the machine will fulfill your needs and helps you in doing your jobs. The features could be an important consideration that will lead you to take the right option for your needs.

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Benefits of Holding a Credit Card Online

When you hold a credit card that is co branded with a business, you will be aware that the business will receive many benefits for having a card that is present online and that can give you many perks. The perks that the business receives, however, will not just be for the businesses to enjoy, as you, too, the cardholder, will experience many rewards that will make it a beneficial experience for you, as well.

For example, you will be able to have cash instantly and whenever you want it without any delay. That can be very beneficial for you if you are a person who travels a lot and needs your money when you need it. You can withdraw from any ATM at all and be sure that the money you will get will be yours and will be there. Also, you will be able to use the card at any stores and gas stations and anywhere that accepts Prepaid MasterCard and Visa, being able to take your clients out with you to business lunches or dinners at local restaurants anywhere the cards are accepted. You will also be able to have access to various programs, such as debit programs and turnkey payment options for both consumers and the owners of the businesses.

Also, you will have fast access to your money transactions, such as payments and transactions and any other kind of incoming money that you want access to. These cards really make managing your money easy and beneficial, as you will always be able to reach it and you will be able to do so without hassles or difficulties. Having a card of this type and sort is just what you need, as it will help you be able to have a card that represents your place of business and helps you get all the things you want and need with the money that is at your fingertips.

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