Credit card business with Non-banking institute has raised the NPAsCredit card business gets tougher for banks
Apnaloan.com Research Bureau
27 Jun 2008
Banks entering into a credit card business with non banking association are struggling. A joint venture of SBI Cards with GE money ran into huge high in non performing assets. As reported by Mint RBI official who didn't wish to be identified said, "banking pertaining with non banking companies for credit card venture partner is not acceptable. It is important that the joint venture partner is regulated by a banking regulator in the geography it comes from"
Earlier this year, Punjab National Bank's proposal to enter into a joint venture credit card business with insurer American International Group(AIG) and Venture Infotek Global Ltd. RBI official further added "We do not want any bank to come to us and clarify that the rising non performing assets and customer complaints in the business is on account of the joint venture partner and not the bank. Banks should have full control in the day to day running business"