PSBs Face Market Share Loss In Premium Credit Cards, GCCs To Private, Foreign Banks: Report

New Delhi, Aug 22 (KNN) Public sector banks (PSBs) are losing market share to private and foreign banks in higher-value segments such as premium credit cards and global capability centres (GCCs), according to discussions at a finance ministry-organised banking conclave.

A paper prepared for the meeting also highlighted a decline in the share of current account and savings account (CASA) deposits in PSBs’ total deposits over the past four years. Since CASA is a relatively low-cost source of funds, its decline could increase banks’ reliance on higher-cost deposits and put pressure on margins, TOI reported.

Credit Cards

The discussions noted that PSBs remain under-represented in premium credit card segments, including corporate travel and expense cards, HNI premium cards and MSME business cards.

Private and foreign banks have developed specialised sales, underwriting and servicing capabilities and offer multiple card variants, while many PSBs continue to rely on relatively standardised products and rewards programmes.

The paper said PSBs have limited structured models for corporate cards, wealth-led card acquisition and business cards, creating scope for them to expand in these segments.

GCC Opportunity

India’s GCC count is projected to rise from around 2,100 currently to 5,000 by 2030, with the sector expected to contribute around USD 150-200 billion to the economy.

Foreign and private banks have taken the lead in securing current account relationships with GCCs. PSBs could target new GCCs and expand into related businesses such as trade finance, payroll banking and retail products for employees.

Private banks are using dedicated multinational coverage teams, targeting GCC parent companies through overseas branches and offering bundled platforms to attract new centres.

Dedicated GCC Desks

The paper recommended that each PSB and public financial institution establish a dedicated GCC desk within six months. It also suggested appointing branch-level relationship managers in Tier-II and Tier-III cities such as Varanasi, Chandigarh, Mysore and Vizag, which are expected to see the next phase of GCC expansion.

The measures are aimed at helping PSBs strengthen their presence in emerging, higher-value banking segments while improving their ability to attract low-cost deposits and deepen corporate relationships.

(KNN Bureau)