SBICard Aims to Overtake HDFC Credit Cards in 3 Years

By | June 19, 2017

Disclaimer: All views are personal and any analysis mentioned are my own thoughts and doesn’t reflect actuals.

SBI Card – the country’s only standalone domestic credit card company is a joint venture between State Bank of India (SBI) and GE Capital, in which SBI owns 60% and the balance 40% is held by the US-based GE Capital. SBICard operates through two businesses: SBICPSL and GE Capital Business. While SBICPSL markets and distributes cards, the GE Capital Business does the back-end work, including technology and processing.

GE Capital’s Exit from SBICard

GE Capital recently announced plans to exit the business. Once GE exits, SBI plans to hike its stake to 74%, post which it plans to take SBI Card – public over the medium term, a top official said, told BusinessLine.

SBICard seems to be aggressive in promotions and forming new strategies post news of GE Exit.

SBI Card Launches PRIME Credit Card

“When SBI has 74% stake, there is no sense to run two entities for same business and there is significant overlap. Merger is going to happen but at this point of time when new partner is on-boarded, then board will decide,” Vijay Jasuja, MD and CEO of SBI Card said on the sidelines of the Tata Star Card launch in Mumbai.

SBI Card Jumps to 2nd Spot in most parameters

While that’s happening on one side, SBIcard now stands second, next to HDFC in below parameters

  1. Number of customers (46.8 lakh)
  2. Total spending on Card (Rs 49,844 crore)

However, in average spends, it lags behind multinational banks (Amex) and HDFC Bank. To change this, the bank earlier revamped SBI Signature to SBI ELITE card and is looking to grow the premium segment further, due to which the SBI PRIME card was launched recently. Average spends on SBI cards are as below

  • Rs 1,20,000 a year for Basic Cards
  • Rs 1,75,000-2,00,000 for SBI Platinum Cards (This will go upto ~3L now)
  • Rs 3,75,000-4,00,000 for SBI Card Elite (This will go upto ~8L now)

This makes it very clear why SBI increased Milestone spend benefit of SBI Elite to 8L. SBI Platinum cards are now upgraded to Prime Card for the same reason – to make you spend more. All these are to increase the “average spends” parameter.

If it works the way it looks, AMEX & HDFC should be coming up with better offers to make us spend more to keep its positions. Hopefully HDFC Regalia will get more benefits or maybe they might launch a new card with higher spend based fee reversal.

However, i don’t think SBI or HDFC can get the #1 spot on average spends as long as AMEX is alive 😀

SBI Card to be the Market Leader in the next 3 years

Jasuja said he wants SBI Card to be the market leader as soon as possible. “We want to penetrate the entire SBI customer base from 35 percent at present. But we should be market leaders in the next 2-3 years’ time.”

SBI Card’s leverage is the huge customer base from SBI that it can easily tap into. If they are at 2nd spot just with 35% penetration of SBI customer base, just few promos like lifetime free cards (including premium ones) for SBI holders can easily push this to 50% levels in no time.

SBI Card to be the Market Leader

HDFC on other hand has good set of cards, but lately squeezing the customers with hell a lot of devaluations back to back like this and this and this, which is not a good sign to keep up the positions. Also, their customer support is too bad compared to SBIcard. If at all i got something done with HDFC, it always happens only on top level escalations. The Phone banking officer or even their supervisors are just hopeless in every conversation.

In meantime, we’ve a new entrant “Yesbank” aiming high for the #1 spot. While their product is incredibly good, they have less known leverage. If they can’t issue cards to tier-2 cities like mine, getting the top spot against SBI & HDFC is hard to even imagine.

Whatsoever, its finally good to see SBIcard coming up with SBI Prime Credit Card to take over HDFC Regalia in most aspects. The market is getting healthy competition and there is long way to go.

What’s fueling the competition?

India is going to be the largest market for credit cards next to US, considering India’s population standing at word’s #1. Demonetization and other digital payments initiatives are the other factors that’s favoring this push.

While banks compete hard to hit the numbers, what it all means for us is that, we’re gonna have lots of good cards and offers in the market very soon, atleast in ~3 years down the line. Hoping for some Hotel based co-branded credit cards in India soon, like they have in US with Hyatt & Hilton.

What do you think about SBICard? Will they make it to #1 Position? Share your thoughts in comments below.

Author: Siddharth

Helping Indians to choose right credit cards, pick right offers and enjoy luxury vacations for less. Day & night exploring the spiritual reality of our human existence.

23 thoughts on “SBICard Aims to Overtake HDFC Credit Cards in 3 Years

  1. Anish Prajivin

    That’s totally true Sid ! But do you think HDFC’s LTF marketing strategy will take over SBI’s paid one ? I currently hold a Regalia Card with 3 lakhs limit and Gold Charge Card. I’m looking for another card can you suggest ?

    1. Siddharth Post author

      SBI has only first year fee, renewals are waived on spends. Though yes, SBI should come up with similar LTF offers to beat the competition.

      Yes, you may consider Prime card for 3L spends.

  2. Ebin Johnson

    I think the mentality of CC users is slowly getting changed . Earlier everyone (including me, :)) was looking for LTF cards. High spenders (eg:- AMEX users) doesn’t mind paying annual fee if they are getting good rewards.

      1. Praveen Perumalla

        True that. I was one of those folks and my approach towards credit cards has changed since the last 6 months.

  3. Danish

    HI Siddharth,

    Thank you for lot of information, the way you have written about sbi card elite prompted me to check more of your review.

    I wanted to take suggestion from you for which card i should go next.
    Following is the details,
    1. I was having SBI Card Elite and i spend almost 4.8Lakh in a year, but they are not giving yatra voucher again so i cancelled it today.
    2. HDFC money back life time free card.
    3. Citi Reward card, free if i spend 30 K on it yearly.

    Please suggest me which card i should replace with SBI elite .


    1. Siddharth Post author

      The newly launched SBI Card PRIME is what you need. Put upto 3L spends on that.

      1. Danish

        Thank you so much for your suggestion.
        Since i closed SBI card Elite, Customer care representative told me to wait for 6 month to get a new card from SBI, i don’t know how it works.
        Looking for some other option as of now, have seen your post on axis bank Privilege Credit . Not too sure after SBI which one i should prefer.

        Anyway Thanks for your help and suggestion, Appreciate your work on the website. lot of information.


  4. Majumdar

    If anyone of you follows US card/travel blogs like thepointsguy or onemileatatime would realise that internationally cards reward much more than most Indian cards do esp joining bonuses are quite hefty. Reasons are simple- lots of Yanks are spendthrifts and heavily borrow on cards, generating massive interest incomes for card cos which they partially share as rewards. Lets hope that Indians too join the list of borrowers so that the more financially prudent among us cardusers can mooch off them!


  5. Praveen Perumalla

    No matter who fights for the top 3 spots, I am more excited that this competition is going to benefit me with lots of offers. With this digital drive, wallets add to the competition as well and I am truly amazed that I can pay digitally even for eating pani pooris these days.

  6. Navin

    Looks like we are already seeing the response from HDFC, thanks to the competition. I just received a mail announcing 10x rewards on HDFC Credit Card spends through Smartbuy. Valid till Aug end.

      1. R Pal

        Yes. Diners too will get 10X (but not 100x) points on Smartpay.

  7. Manish

    SBI can never come on top until unless they improve their customer service. They can’t even understand simple problem and unable to solve customer queries even after days it will not be resolved. HDFC on the other end is far much better and have set good benchmark set which SIB can’t catch up the way they are working.

    1. Siddharth Post author

      SMS PROBLEM to 9212500888 and get a call back from within 24 hours. Always availed and these guys knew better info than usual support!

      1. Jay

        Saw this post yesterday night at 12:30 AM and messaged PROBLEM, got a call at 1:12 AM midnight from the SBI Team. Was shocked. They were definitely better and the usual customer support guys and good thing is no more IVR headache.

      2. Manish

        Great! I will try this as well.

        I have 5 queries raised,none of them is resolved till today and even got calls from them couple of times.
        They are very casual and same standard answer, we are investigating the issue and resolve your query by xx date which is 15 days from current date.

        1. Siddharth Post author

          Yes, that’s true. 10-15 days for solving queries (actually they don’t sometimes) is one of the worst part with SBIcards!

  8. Mickey

    Siddharth any update on this article?

    I’m an SBI a/c holder since long but they never offered any card to me. Only trying to sell me MF’s and NFO’s. How are they planning to tap into customers


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