SBI Card CEO Hardayal Prasad believes that the challenging situation due to the Covid-19 crisis will further push credit card transactions.
SBI Card reported a 28% growth in credit cards to INR10.5m ($139,584) in fiscal ended March 2020, the Press Trust of India (PTI) reported.
The company registered a 44% surge in net profit to INR124.5bn ($1.65bn) during 2019-20 compared with INR86.5bn ($1.15bn) in the preceding fiscal.
The rise in profit is a consequence of the growth in cards number, spends and receivables, the report added.
Even after the lockdown is removed, businesses may take about two-to-three months to come back to normal, Prasad stated.
Since staying indoors is becoming inevitable, people might spend more to upgrade their homes with better products like a bigger TV or a fridge, he said.
In an interview with PTI, Prasad said: “Given whatever is the economic condition, I think transaction through credit cards will continue to see a rise.”
“If you are going to stay more time at home and you are not going out, you probably will look at more avenues also to make your house a better place,” he said.
On the contrary, card spending towards travelling, staying at hotels, summer vacations, cinema and entertainment will be on the wane.
Prasad added: “Looking at travel, I am told 60-80% of their business happens during the summer, which will not happen now.”
The CEO, however, is confident that the big sales coming up during winter festivals and New Year will compensate for the lost ground.
Additionally, SBI Card is looking at avenues like co-branded cards, except in the airlines sector that will continue to face challenges for now.
The company currently has co-branded card with Apollo Hospitals and there is scope in the education sector as many people are now using online courses.
SBI Cards and Payment Services, operating under the brand name SBI Card, is a joint venture (JV) between the State Bank of India (SBI) and Carlyle Group.
SBI holds 76% stake in SBI Cards, while the remaining is held by Carlyle Group.