SBI is giving credit card to anyone having Rs 25,000 in FD and this can be scary

In a bid to attract more and more people opt for digital payment options, State Bank of India (SBI) is planning to come out with credit cards for anyone who has a Rs 25,000 fixed deposit in any bank.

If the person has a fixed deposit of Rs 25,000 under his name, he is eligible to get a credit card without any proof of income or a credit history. The card will also be free of any cost.

The bank's subsidiary, SBI Cards, also plans to issue credit cards to students of top 100 educational institutions in India without any income proof.

The second largest card issuer is now looking forward to an increment in new products for the masses as parent SBI plans to add five lakh new swipe machines.

Issuance will be against eKYC, hence the cost of card will be kept low.

"Initially, this will be only for SBI customers but in future the lien can be on any bank's FD," Vijay Jasuja, CEO, SBI Cards, told TOI.

While the credit card against FD will be launched in January, the student card will be launched in December itself.

The card company's move dovetails with the parent bank's plan to install around five lakh additional card swipe machines. Besides servicing shops without machines, the bank will launch an app which will enable offline card payments via QR code.

"Most of the merchants in small cities do not have PoS (swipe) machines. They can accept payments through QR codes. The credit card will reside in the mobile and by scanning the code, the cardholder can make the payment," Jasuja told TOI.

SBI Cards, the joint venture between SBI and GE Capital, is in the process of getting new private equity partners with GE deciding to exit. Following GE's decision to exit, SBI has become more aggressive on the card business.

Jasuja also said that promotion of debit cards by the government would actually push up awareness of credit cards.

"It is a bit like automobiles where buyers start with base level cars and move to mid-segment. Similarly, if there are more debit card users, they will be drawn to the advantages of credit card," Jasuja told TOI.

He said that with interoperable QR acceptance, aggregators are expected to enroll shopkeepers, enabling wider acceptance of cards. The other advantage in getting first-time users into credit cards is that the bank will be able to get a credit history, making it possible to extend personal loans in future.