BoB repositions card arm as non-banking finance co

Mumbai: Bank of Baroda (BoB) has drawn a road map to be among the top three credit card issuers in the country. The state-owned lender — which last year hired Manoj Piplani, head of Barclay's UK card business — has now repositioned its cards division as a non-banking finance company (NBFC) that will also extend retail loans.

On Wednesday, the bank launched its three cards — Easy, Select and Premier — for different segments with five times rewards. According to the bank's MD & CEO P S Jayakumar, a former Citibanker, this is part of the bank's "intense transformation" to become future-ready by filling in white spaces where it was not present. Although BoB did have a credit card base, it had been stagnant for years. The repositioning makes it more relevant to the times and its customers, Jayakumar said.

Although public sector banks account for 80% of the 83 crore debit cards in India, they have little over 20% share of the 3.5 crore credit cards outstanding. SBI, which issues cards through a subsidiary, has 56 lakh of the 73 lakh credit cards issued by PSBs. BoB is the second bank in the country to have a card-issuing subsidiary.

Speaking to newspersons, Piplani said that the NBFC — BoB Financial Services — will expand its network from 38 to 100 cities and increase headcount from 150 to 1,000-plus in sales and back-end operations. "In two-three years, we will be the third-largest issuer of new cards. It will take us a few years to be third in terms of total outstanding cards. We are also exploring tie-ups with digital scale players to get customer access and the idea is to try and leapfrog and reduce this journey," said Piplani.

The card company would be using the bank's customer base for pre-approved cards and will partner fintech companies for distribution. Besides cards, BoB Financial services will offer loan against shares and personal loans, among other financing products. "Right now, the technology transformation, the capability for risk management, analytics and operations is ready. What we are going to do is go into massive marketing and distribution campaign," Piplani said.

Bank Of Baroda