Murali Ramakrishnan, MD & CEO of South Indian Bank, on Monday, said risks in the credit card business are manageable. Ramakrishnan also said the credit card business has been started for digital-savvy customers.

The stock is in focus after the bank made a return to the credit card market in the month of July and distributed 98 cards.

In an interview with CNBC-TV18, Ramakrishnan said, “The credit card proposition we started is basically with an objective to cater to the digitally savvy customers. We are also targeting new, young digitally savvy customers. The entire arrangement is basically for tying up with a fintech (financial technology). Therefore, the objective is to offer the best in class credit card for our customers and for new to bank customers.”

Also Read: Credit cards in India: HDFC Bank leads in market share but this lender beats it in per card spend

On risks, he said, “We will be offering credit cards to our existing customers first; we have an extensive track record of them and their liability track record with us and we know what kind of usage pattern they have, what kind of money they keep in their account. So we are using analytics to pre-qualify these customers. Therefore, we believe that these risks are definitely manageable and we are very comfortable with that.”

“As we offer this product to open market again, we will be extensively using data analytics and the bureau data and that's where our partnership also comes in handy,” said Ramakrishnan.

Explained: How banks earn from credit cards?

On the business front, he said that the collections have been improving month on month (MoM) and the bank will also improve net interest margin (NIM) with retail loans, especially personal loans and housing loans.

The bank's share today closed at Rs 9.95 on the NSE.

For the entire management interview, watch the video

(Edited by : Bivekananda Biswas)

First Published:Sept 6, 2021 3:35 PM IST