Private sector lender Kotak Mahindra Bank and India’s largest airline carrier, IndiGo, have joined hands to launch co-branded credit cards that offer customer reward points that they can redeem for booking air tickets and value-added services on IndiGo.
Essentially, the cards will work on a reward proposition of an airline ticket for free.
The bank is offering two co-branded credit cards – 6E Rewards XL and 6E Rewards – along with its partner Indigo. The 6E rewards programme of IndiGo is linked to a co-branded card wherein members can earn rewards by using their plastic on IndiGo and other merchants and redeem them for benefits. Basically, the idea is that when a customer uses a credit card, the reward points that gets accumulated over a period of time can be redeemed for booking air tickets and value-added services on IndiGo.
The base variant (6E Rewards) is priced at Rs 700 (plus GST) and has a host of welcome benefits, including a complimentary welcome ticket of Rs 1,500 and 6E prime add-on services worth Rs 899. The higher variant (6E Rewards XL) is priced at Rs 1,500 (plus GST) as an introductory offer. It has welcome benefits, including complimentary tickets worth Rs 3,000 and add-on services worth Rs 899, among other things.
Kotak Mahindra Bank after being conservative on the unsecured credit business since the beginning of the pandemic is now looking to grow it as the economy has bounced back reasonably. Kotak Mahindra Bank has 2.54 million outstanding credit cards in the market as of October, 2021. It has added more than 100,000 credit cards to its kitty in the last month. The bank is bullish on the segment and is looking to grow it like the rest of its peers.
“Unsecured credit is the centre of the plate business for us and the good thing today is the unsecured part of our balance sheet is relatively lighter, which gives us a huge headroom to grow as we try to build a balanced book for ourselves. So, it is fair to say, right now, we are extremely bullish on the unsecured credit space and the credit card segment. We are doing a number of things to strengthen our market position in both these businesses”, said Ambuj Chandna, President, Consumer Assets, Kotak Mahindra Bank.
“When the pandemic began, we were dealing with a lot of unknowns, hence we were conservative on the unsecured credit segment as we wanted to see this whole covid thing play out. We are happy with the way the country has bounced back reasonably quick and fast”, he said.
There are 400 million people in India who are credit active yet there are 66 million credit cards currently. So, there is a huge headroom to grow as far as the credit card space segment is concerned.
Willy Boulter, Chief Commercial Officer, IndiGo said, as the economy is looking up, travel for business and leisure has come back. It is returning to its levels seen before the pandemic. Domestic travel is roughly at 98 per cent of what it was pre-pandemic and the airline is now expanding the number of destinations it is serving across India.
IndiGo started the 6E reward programme two years ago and already has the largest credit card issuer, HDFC Bank, as its partner. “We intend to continue the partnership with HDFC Bank. Mastercard is on hold at the moment but we are talking with other network partners and we are very confident that we can continue to grow the number of cards offered by both our banking partners”, he said.
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Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd
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