Reliance Retail Enters Co-Branded Credit Card Space With SBI Card

SBI Cards and Payments Services Ltd. has launched a co-branded credit card in partnership with Reliance Retail Ltd.

The card, launched in two variants—Reliance SBI Card and Reliance SBI Card PRIME, is aimed at offering "a holistic and rewarding shopping experience to customers, across segments, with varied spending needs, right from mass to premium", according to an exchange filing on Tuesday.

SBI Card is the country’s only listed credit card issuer.

The Reliance SBI Card PRIME holders will have to pay an annual renewal fee of Rs 2,999, along with applicable taxes, while that of Reliance SBI Card would pay Rs 499 plus applicable taxes, it said.

The renewal fee would be waived when annual spend on Reliance SBI Card PRIME crosses Rs 3 lakh. The amount stands at Rs 1 lakh for Reliance SBI Card holders.

The co-branded card has been introduced on RuPay platform. 

The launch comes at a time when SBI Card is treading on risks related to unsecured loans. Analysts trimmed down the company's earnings estimates for FY24 by 5-7%, on account of higher credit costs, despite a 14.5% rise in net profit to Rs 602.9 crore during Q2.

The company's net interest margin is expected to dip in the December quarter, according to Jefferies. "...Portfolio behaviour of the stressed 2019 customer cohort has improved, but credit costs may take longer to normalise due to a broader uptick in stress in unsecured loans," it said in an Oct. 29 note.

The aim is to focus on growing the company's cards-in-force, spends and receivables, Abhijit Chakravorty, managing director and chief executive officer of SBI Card, told Financial Express. The partnership with Reliance Retail is in line with the same strategy.

As on Sept. 30, the company's cards-in-force rose by 94,784 in a month to 1.78 crore, according to Reserve Bank of India data. Going by that, SBI Card's market share stood at 19.2% as on Sept. 30—making it the second largest credit card issuer in the country, after HDFC Bank Ltd.