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Confident that salaried people will continue to make card payments on time: Hardayal Prasad

After lockdown, field collection has come to standstill, says MD & CEO of SBI Card.

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Last Updated: Mar 27, 2020, 05.31 PM IST
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Mr-Hardayal-Prasad-MD-CEO-SBI-Card
There is a little uptick that is coming in and we are seeing that other than the field collection, people are using the digital modes.
The kind of announcements done by the RBI are being welcomed across the industry. I believe that the card payments have not been included in this moratorium. What are your initial thoughts?
The overall announcement has been extremely positive for the industry and especially areas which are badly affected by the COVID-19. As we go forward, the effect of the COVID and how long it will last will actually determine how the economy and the other things are going to pan out. More importantly, this announcement is only for those areas. Especially the industry where term loans and others are given, we will have to see and may be probably seek some clarifications from the Reserve Bank of India on the coverage of credit cards.

However, we still are taking some measures. Very importantly, a very large portfolio is of the salaried class which as the government has announced and urged the industry not to retrench their staff. That will play a big role in terms of ensuring that the repayments are made and in case there are issues, we will always look at that part.

There is a sense on the Street that your collections will get impacted by what is happening right now because of the environment; however temporary it might be. Of course, it is a very robust business model you have run so far but talk to us about what is your estimate to what extent can your collections and repayments be impacted?
Actually after the lockdown, the field staff is not able to move out at all; as the field collection has come absolutely to standstill. What we are doing is that we have gone and used the technology for which we have built the infrastructure in the last few years. We are on the cloud platform in terms of the tele callings and others. We are trying to talk to the customers and say that you have digital modes of repayment; you can use the bank lines, you can use that for repaying the loans. There is a little uptick that is coming in and we are seeing that other than the field collection, people are using the digital modes. As 97% of the people have always used the digital mode of repayment of their credit card, we will see that the ones who regularly pay, the ones who have no delinquency will continue to pay. Definitely it will have some impact on the field collection.

Last time this kind of crisis actually came in the financial sector in 2008. Do you think because of what is happening, your metrics on collections on the assets will actually go bad and could actually match or mirror those kinds of numbers? Or do you think the impact would not be that much?
The financial crisis was completely different in India as well as globally. I would not say that it is actually a replication of what happened then. We have had some moments of crisis when there was floods in Chennai, there was Tsunami crisis and there have been many instances where these kinds of sudden problems have erupted. And this company as well as many others have responded and have ensured that the customers and the clients are taken care of in terms of the repayment, in terms of some moratorium, in terms of the fee structure, in terms of interest. We have and we had earlier also responded to that.

I am sure going forward we will know how prolonged the COVID effect is. If it is not very prolonged and the way the lockdown is taking place, I am sure that it is definitely not going to be a crisis situation as we saw in the financial mess that happened in 2008.
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