India’s second largest PSU bank, Punjab National bank which was seeking permission from the RBI to launch credit cards in India in association with AIG – American International Group has decided to go solo because of lack of clarity and clear signal from the RBI.
PNB will launch full fledged credit cards. Currently the bank is offering co-branded cards in association with HSBC wherein PNB sources clients while the risk and reward are reflected in the books of HSBC. However, going forward PNB will launch a wholly owned subsidiary by October-08.
PNB Official said,
We have decided to start it within the bank since it does not require any regulatory approval. Subsequently if the RBI approved the JV, we will hive off the credit card division.
PNB has a large customer base and it is really essential they launch the card division as slowly as possible with good customer care in place.