When you think of premium credit cards, odds are that you think of a Diners Club or an American Express (Amex) or maybe a Citibank. The Companies that have, over decades, cultivated an air of exclusivity. What you probably wouldn't think of was India's largest bank, government-owned State Bank of India (SBI). And with good reason. Unlike the other companies I mentioned, SBI is better known for catering to the 99% rather than to one-percenters.
SBI, though, now has an unexpected opportunity to flip this script. While Citi and Amex have traditionally been the market leaders in India's premium credit card space, that pecking order is all set to change. Citi, for one, is getting out of the country in a hurry, with either Kotak Mahindra or HDFC the most likely to acquire its business. Amex, meanwhile, cannot issue new cards as it struggles to comply with India's data localisation requirements for payments companies. A source within Amex says the company is targeting compliance by mid-2022.
While Citi charts an exit route and Amex weathers the storm, it throws open an opportunity for any institution bold enough to take the premium credit card bull by the horns. And, from the looks of it, SBI fancies its chances. Its bullishness isn't without cause. SBI Cards—SBI's credit card arm—has grown almost 50% since April 2019 even as Amex and Citi have seen their card count shrink. Buoyed by this success, SBI wants a greater share of the premium segment, which sees higher monthly spends and is less risky as well.
Can SBI build the sort of perception and prestige of a Diners Club or Amex? More crucially, can it offer similar levels of service?