The Reserve Bank of India is concerned about the growth in consumer credit. To rein in the high- credit growth in this segment, in January, the central bank doubled the provisioning requirement for credit card loans, from 1-2%, raising the banks’ cost of credit card business.
However, that has not dampened the spirit of 300-year-old British bank Barclays Plc. It wants to become one of the top three credit-card players in India. In an exclusive interview with Mint, Antony Jenkins, chief executive officer of Barclaycard, says the bank does not think that regulatory concerns will be a hindrance. Edited extracts:
What brings Barclays to India?
Barclays is here because we are attracted to the growth dynamics of the country. There is the burgeoning middle class whose aspirational levels run high.
This, along with a sustainable economy that is growing at a fast pace, makes India an imperative for us. Being the largest issuer of cards in the UK and Europe with a total of 14 million customers, we have global expertise in plastic cards. India is a country that offers a great opportunity to us.
Aren’t you a late entrant?
I don’t think that we are late at all. The middle class is still growing. Every thing that the (existing) players have been doing may not be right. According to me, it’s the perfect time to enter (the market).
You are coming at a time when the regulator is concerned about the growth of credit rate in the country and is clamping down on banks.
Barclaycard is present in 20 markets. In several other markets we have faced the issues like regulators being concerned about a heady pace of credit growth. We have also faced intense competition. This is not new to us and, because we have dealt with such issues before, we have a competitive advantage. We know that it will be a long haul. We consider this a marathon and not a sprint.
How do you propose to be different from competition?
We are used to competing in crowded markets and that is our edge. We will deliver more value to the customers and that will differentiate us from competition.
At a time when a customer has two or three cards in her wallet, what will make us different is our product features, apart from the brand and reputation that we come with. We have stripped away a lot of the fine print and are bringing to the customer a simple card that will not give her any nasty surprises. Our research in India told us that the customer is looking for a simple card that gives her control over her finances.
India is crazy about cricket but you are bringing in a soccer card.
Our research showed that that urban Indian male looks at soccer as an aspirational sport. Forty-three million Indians watch the English Premier League religiously. We wanted to cater to this segment with a “money can’t buy” product that will set the customer apart from his peers. We brought in the English premier league card, dedicated to the soccer fans. We are not going to have a cookie-cutter approach.
How do you plan to grow business?
We want to be among the top three issuers of cards in India over time but we are not looking at a volume-based approach. Since we are starting out from scratch in the card business, we will not have big numbers overnight, but in terms of origination, every month we intend to become a significant player very soon.
What sets the Indian consumer apart from the rest of the world?
Indian market is much less evolved in terms of usage of cards. Indian consumers are just beginning to use credit cards as a source of personal finances. That is the key difference.
Are you deeply committed to the Indian market?
In terms of investments, we have already had $300 million that has come into India and a commitment of another $70 million. Barclaycard will have a team of 80 people in the first year.
Who is going to be your brand ambassador?
Jeev Milkha Singh is going to be our brand ambassador in India. He is one of the best golfers in the world today and he comes from a sportsman’s family. That signifies one of our key attributes—heritage.