Yes Bank enters credit card space, eyes No 3 slot in 4 years

Setting an ambitious target of having five million customers by 2020 and to become the No 3 player in the extremely competitive industry, mid-sized lender Yes Bank today made a foray into the credit card market. 

At a time when lenders are playing it safe by sticking to their own customers to sell credit cards, the bank plans to go all out seeking customers from outside for the unsecured lending product.

"Credit card is central to our customer acquisition plans. We don't believe there is anything like an internal customer or an external customer," the bank's senior group president for retail and business banking Pralay Mondal said. 

The bank is targeting to control up to 18 per cent of the industry by spends by notching up around five million active card customers by 2020, which Mondal said will make it the third biggest player. 

Mondal, who is credited with HDFC Bank's successes on retail front, said he is confident of achieving the ambitious target, saying the market is skewed towards a few players now. 

With over 7.25 million cards, HDFC Bank is the largest card issuer now, followed by ICICI Bank with 3.65 million cards and SBI with 3.62 million. 

Even though retail segment has gained greater focus, banks are shy of growing their unsecured books comprising credit card folios. 

Mondal said the growth in cashless payments to 5 per cent from the present 2 per cent, a greater acceptance in electronic payments by the small businesses, card's features, technology to assess a customer's risk. 

The card proposition includes seven variants and lowest interest rates in the industry, starting from 1.2 per cent per month to 2.4 per cent, he said, adding the card fees will start from Rs 250 and go up as per the variant a customer chooses. 

Head of credit cards business, Rajanish Prabhu said a team of over 400 have already been hired for the business.