Bank of Baroda's credit cards subsidiary has decided to go the whole hog in the fiercely competitive plastic money market.
Bobcards Ltd has followed ICICI Bank in offering free-for-life cards and is also on a merchant establishment acquisition spree through special schemes.
Bobcards will give lifetime free credit cards to BoB customers having super savings account and also to those having fixed deposits of Rs 25,000 and above.
It is also offering free for life gold card and its newly-launched youth and woman categories of credit cards to non-BoB customers.
"Even if we tap just 10 per cent of Bank of Baroda's customer base, we will add as much as four million credit card customers," said S P Garg, managing director, Bobcards.
Bobcards has 8.5 lakh customers and has set a target of increasing it to 10 lakh by March 2006 and then double it in by the end of 2006-07.
Bobcards is also giving away the point-of-sale terminals to its member merchant establishments as part of its strategy to expand its own merchant network.
On August 13, it added 1,000 merchant establishments onto its network. Owning of POS terminals helps card issuers to increase their fee income as the bank owning the POS gets a share of the amount merchants pay for payments by credit cards issued by all banks.
BoB has recently infused Rs 80 crore (Rs 800 million) capital into the cards company to fund its expansion.
The total equity capital of the subsidiary is now Rs 100 crore (Rs 1 billion). Bobcards is also rolling out a customer delight bonanza scheme 2005-06 whereby its merchants will offer special discounts to Bobcards holders.
The scheme was first launched in Rajasthan earlier this month and would be extended to Maharashtra, Gujarat and Goa in September.
