The Launch of LIC Credit Card

Today in India we have about 20 million credit cards and each of them boasts to be unique and claim that they have an exclusive clientele base. In such a scenario what makes the Life Insurance Corporation of India (LIC)’s credit card unique is the fact that it is being launched for the benefit of the policy holders. They aim to become one of the 1st insurance companies in India where the client will be able to pay for his/her own premium through the LIC credit cards. They aim at initially being able to provide these services to a select section of their HNI clients and to then extend it to others. In order to do this, LIC has entered into an agreement with Corporation Bank. They hold a 27% stake in the bank.

Earlier, LIC had planned to team up with GE Money but as their partnership did not take off, they decided to team up with Corporation bank. Like said earlier, the main aim of LIC for entering into the credit card foray is for the benefit of its existing policy holders but they are also aiming at being able to leverage on its large customer base and the wide distribution network that it comprises.

The LIC credit card that is planned to be launched very soon will be a white labeled, co branded card as a result of the joint venture between the Corporation bank and LIC. These cards will not be offered free of cost to LIC’s policy holders but a nominal fee will be charged for it. LIC aims at being able to provide value adds to its customers by offering services for free or for a very low price. They are also working towards a low interest rate of about 0.9% - 1% per month wherein most other cards charge 1.9%-2.2% per month. A wholly owned company called the “LIC cards services ltd” will be in charge of all the aspects of the credit card. The Corporation bank shall be extending its existing credit card facilities to LIC to enable use of both its Master and Visa card. By this joint venture they also aim at being able to leverage on the Corporation banks strong brand and wide branch, ATM and sales distribution network.