LVB readies for credit card foray, targets HNI services

Adds new bancassurance ally; to recruit 300 by March

In a bid to increase fee-based income, Karur-based private sector lender Lakshmi Vilas Bank has signed with Max Life insurance last month, a top executive said.

Talking to Deccan Herald, here on Monday, Lakshmi Vilas Bank MD and CEO Rakesh Sharma said, “To increase our fee-based income, we have tied up with Max Life insurance. Along with bancassurance products of other insurers, Max Life insurance products will be sold throughout branches across India. The bank is targeting 5 per cent in bancassurance out of its total fee-based income.”

Bancassurance is a French term referring to the selling of insurance through a bank’s established distribution channels.

The bank is in final stages of tying up with a leading credit card issuing bank in the country for a  co-branded credit card on the VISA platform. “Right now, we don’t have credit cards. Credit cards have great demand, but is an expensive proposition. It is a better way of doing business by tying up with one of the country’s large lenders,” Sharma added.

For its planned general insurance bancassurance, the bank is in talks with potential partners and is awaiting IRDA approval.

Sharma was in Bengaluru to inaugurate the bank’s 400th branch and 750th ATM at Bommanahalli. He also launched LVB Crown Services for HNIs (high networth individuals).
The products enable customers to avail services of dedicated relationship managers, VISA Platinum debit card, free personal accidental insurance of Rs 25 lakh and 25 per cent discount on other facilities like locker rentals. Out of 1.2 million LVB customers, the bank is targeting 10 per cent HNI customers.

LVB also offers free family banking accounts namely Lakshmi Mahila and Lakshmi Youth accounts, besides providing higher daily ATM withdrawal limits.

The bank aims to open five more Crown centres by March and 20 by the next financial year.

LVB came into existence in  1926 and has a national presence serving over 1.2 million customers through its 400 branches, seven extension counters and 750 ATMs, totaling close to 1,100 outlets in 16 states and the Union Territory of Pondicherry.

In Karnataka, LVB has 38 branches, out of which 18 are in Bengaluru. The bank has a headcount of 3,300 and it recently recruited 120 officers, and by March, 300 clerks will be hired.

Lakshmi Vilas Bank’s profit surged over fourfold to Rs 32.5 crore for the quarter-ended December 2014 compared with Rs 7.4 crore in the year-ago period.

The growth in profit was largely led by higher other income and lower provisions despite higher tax outflow of Rs 9 crore (against nil in Q3FY14) while asset quality also improved significantly.