Kotak Co-Branded Credit Cards Soon

Kotak Bank which entered the Credit Card business earlier this year is all set to achieve a customer base of 250,000 by the end of FY09. They are also planning to launch a host of co-branded credit cards. Mr. Pani, Business Head of Cards division said.

We are looking at entering into partnerships in the high end segment in the airline, retail, entertainment like movie or dining chains.

Kindly note his statement “high end segment” – this is where the delinquencies are far less and even if they are charged a small fee on the card and are generous in rewards and other kickbacks they get, consumers are likely to accept – a win-win for both consumers and the bank. [Recall HDFC Bank’s strategy for maintaing high quality assets ?]

Kotak has issued Kotak Visa – Gold, Platinum and Signature Cards. The average spend by an Indian on Gold Cards is Rs 4,000 a month. While Kotak’s customer average spend on Gold Card is Rs 10,000. Kotak has been extremely careful in terms of the kind and quality of customers being taken on the portfolio.

Credit card growth rate is expected to be in 20s percent this year and will slip to 10-12% next year. For the past 5 years, the industry growth rate has been a whopping 38%.

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