SBI, GE Money to expand JV to personal loan and credit insurance segments

State Bank of India (SBI) and GE Money are trying to repair their joint venture after a brief period of strain over bad debt and losses at SBI Cards, the country's second largest card company. The SBI Card JV will continue to operate, under two separate JVs: SBI Cards & Payment Services Pvt. Ltd. (SBICPSL), which focuses on the marketing and distribution of SBI Cards, and GE Capital Business Processes Management Services Pvt. Ltd. (GEBPMSL), which handles the technology and processing needs of the JV.

SBI and GE Money have jointly announced to expand their 10 year old strategic partnership to a new level of growth and expansion in the future. A meeting was held between Mr. O. P. Bhatt, Chairman, State Bank of India and Mr. Yoshiaki Fujimori President & CEO, GE Money Asia in which it was decided SBI and GE would maintain the same percentage of ownership in both the ventures.

The JV partners also agreed to nominate Mr. Diwakar Gupta, one of the top executives of State Bank of India, as the CEO of SBI Cards & Payment Services Pvt. Ltd.

Under the new strategic initiative, SBICPSL will be better positioned to participate in the high-growth consumer financial services industry by offering other consumer financial products, such as personal loans and credit insurance, effectively expanding the scope of the JV. This move is a natural extension of the JV's leadership in the credit card space, and the success enjoyed by both partners. By cross-selling related financial services and products to its existing large pool of customers, the JV will also be offering an enriched portfolio of products to help customers realize their financial needs.

GEBPMSL will control the scale of its processing platforms to serve other providers in India, in addition to SBI Card's products and services.
After the bank's annual results Mr Bhat told the reporters that the bank has plans to turn around the cards business. He pointed out," India's rapidly expanding financial services sector offers several business opportunities and State Bank of India will be pleased to exploit these opportunities, in partnership with a global giant like GE, wherever possible."

He added SBI was also unhappy with GE's decision to partner LIC for its credit card venture. However, with GE Money reviewing its Indian operations, the senior management has not shown much interest in pursuing the venture. LIC's MoU with GE entered into last year was valid for 90 days and has since expired. The card business was to be launched on April 1, but there has been no movement on this business. LIC may review its business plan in consultation with Corporation Bank.