EXHIBIT 10.25


                                  CONFIDENTIAL


November 6, 1996



Shailesh J. Mehta
President & COO
Providian Corporation
400 West Market Street
Louisville, KY  40202

Dear Shailesh:

         This will set forth our mutual  agreements  concerning  certain matters
relating to employment between you ("Executive") and Providian  Corporation (the
"Corporation").  The parties agree that, except as otherwise  expressly provided
herein,  this letter agreement is intended to supplement,  and not to supersede,
the Employment Agreement dated as of February 21, 1996 between Executive and the
Corporation (the "Existing  Employment  Agreement").  Capitalized terms used but
not  otherwise  defined  herein shall have the meanings  assigned to them in the
Existing  Employment  Agreement;  provided  that,  to the  extent  that any such
capitalized term is defined in the Existing Employment Agreement by reference to
the date of a Change in Control,  for purposes of the definition of such term as
used in this  letter  agreement,  the  earlier of January 1, 1998 or the date of
termination of  Executive's  employment  shall be substituted  for the date of a
Change in Control.

         1. Except as otherwise  expressly  provided  herein,  in the event that
either (a) Executive is terminated without Cause prior to January 1, 1998 or (b)
Executive  has not been offered the position of Chief  Executive  Officer of the
Corporation  prior to January 1, 1998 and Executive submits his resignation from
employment with the Corporation at any time from January 1, 1998 through January
31, 1988, then, in either event, the Corporation shall pay to the Executive:

     (i) his Base Salary through the date of termination of his employment;



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                  (ii) a  bonus,  if not  previously  paid,  in  respect  of the
corporation's last completed fiscal year prior to the date of termination of his
employment,  calculated in accordance  with the formula under the  Corporation's
bonus plan applicable to the Executive for such year;

                  (iii)  in  addition  to  any  bonus  payable  pursuant  to the
foregoing  subparagraph  (ii),  but  only  in  the  event  of a  termination  of
employment under clause (a) of this paragraph 1, a bonus equal to the product of
(A) his Base  Salary  in  effect on the date of  termination  of his  employment
prorated to the date of such termination, and (B) the bonus Percentage;

     (iv)  his  Base  Salary,  at the  rate  in  effect  at  termination  of his
employment, until the third anniversary of his termination of employment;

                  (v) any other bonus or  compensation  deferred under any plans
and programs of the  Corporation  in  accordance  with such plans and  programs,
except as otherwise provided pursuant to the terms of any such plan or program;

     (vi)  continued  vesting  following  termination  of his  employment in any
awards of restricted stock made to the Executive, until the third anniversary of
his termination of employment;

                  (vii)  continuation in all employee  benefit plans or programs
in which he was  participating  at the termination of his employment,  until the
third  anniversary of his termination of employment,  but (A) only to the extent
such plans or programs  permit  continued  participation  after  termination  of
employment and (B) in no event beyond the date, if any, that  Executive  becomes
employed by a subsequent employer; and

     (viii)  other  benefits in  accordance  with the plans and  programs of the
Corporation.

         In the event there is a termination of the Executive's employment under
clause (a) of this  paragraph 1, the  Corporation  shall,  upon the  Executive's
written  request  furnished to the  Corporation  within 20 days  following  such
termination,  make a lump sum payment to the Executive in an amount equal to the
Spread on the Payment Date with  respect to the relevant  options in each option
grant,  multiplied in each case by the number of relevant options in each option
grant. In the event that the Executive does not request such payment,  or in the
event of a termination of the  Executive's  employment  under clause (b) of this
paragraph 1, each option grant shall become fully  exercisable as of the date of
termination of employment and shall remain outstanding for three years following
termination  of employment  or, if shorter,  for the remainder of the originally
scheduled  term of such option grant;  provided that, to the extent the terms of
any option grant do not permit the option to remain outstanding for such period,
the  corporation  shall make a lump sum  payment to the  executive  in an amount
equal to the Spread on the Payment Date with respect to the relevant  options in
each  such  option  grant,  multiplied  in each case by the  number of  relevant
options in each such option grant. For the purpose of the immediately  preceding
two  sentences,  "relevant  options" in any  referenced  option  grant means any
options granted by the Corporation to the Executive to purchase its common stock
that (i) are outstanding on the date of termination of his employment and remain
unexercised  on the Payment Date  (whether or not such  options  expire by their
terms prior to the Payment Date) and (ii) by their terms were exercisable on the
date of termination of his employment or which would have become  exercisable if
his employment had continued  until the third  anniversary of his termination of
employment.  The Corporation shall make any such lump sum payment on the Payment
Date (or,  if later,  promptly  following  the  Executive's  request)  and, as a
condition to making such  payment,  the  Executive  agrees that all  outstanding
options  granted  to him  with  respect  to which  such  payment  is made  shall
thereupon be canceled.

         For purposes of the foregoing,  "Spread" shall mean the excess, if any,
of the Fair Market Value of a share of the common stock of the Corporation  over
the purchase  price of such share  pursuant to any option to purchase such share
granted by the  Corporation to the Executive;  and "Payment Date" shall mean the
first  business day following  termination of the  Executive's  employment on or
after which he is no longer  subject to the  provisions  of Section 16(b) of the
Securities  Exchange  Act of 1934,  as  amended,  with  respect to any  payments
required  to be  made  to him  by  the  Corporation  pursuant  to the  foregoing
provisions of this  paragraph 1. "Fair Market Value" shall mean the mean between
the  highest  and lowest sale price of the common  stock of the  Corporation  as
reflected on the consolidated tape of New York Stock Exchange issues on the date
preceding  the date as of which such value is being  determined.  If the commons
stock of the  Corporation is not sold on such day, the value shall be determined
on the next preceding day on which the common stock of the Corporation is sold.

         2.  Executive  and  the  Corporation  agree  that,  in the  event  of a
termination of the  Executive's  employment  entitling the Executive to payments
under the  provisions  of  paragraph  1, such  provisions  of  paragraph  1 will
supersede the provisions of the Existing Employment  Agreement,  and no payments
will be due to the  Executive  under the  Existing  Employment  Agreement in the
event of a  Change  in  Control  of the  Corporation  following  termination  of
Executive's  employment  with the  Corporation.  Executive  and the  Corporation
further agree that, in the event of a Change in Control of the Corporation prior
to any  termination  of Executive's  employment,  the provisions of the Existing
Employment  Agreement  shall  govern and this  letter  agreement  shall be of no
further force or effect.

         3.  Notwithstanding any provision of the Existing Employment  Agreement
or this letter  agreement to the  contrary,  in the event of a spin-off or other
separation   transaction   with  respect  to  Providian   Bancorp,   Inc.   (the
"Subsidiary"),  or all or  substantially  all the assets of the  Subsidiary,  in
connection  with which the Subsidiary (or the successor to all or  substantially
all the assets of the Subsidiary) becomes a separate publicly traded

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company and the  Executive  is appointed to and accepts the position of Chairman
and Chief  Executive  Officer of the Subsidiary (or such  successor),  then upon
consummation of such spin-off or other  transaction,  all the provisions of this
letter agreement and of the Existing Employment Agreement shall expire and shall
cease to have any further force or effect.

         4. (a)  During  the  period  beginning  on the date of the  Executive's
termination of employment and ending one year  thereafter,  the Executive  shall
not personally  solicit any existing  customer or partner of the  Corporation or
any prospective  customer or partner identified in the business proposals of the
Corporation   outstanding  on  the  date  of  the  Executive's   termination  of
employment,  in either case as limited to those  concerns known by the Executive
either to be, or to have the  possibility of becoming,  customers or partners of
the  Corporation  and, in the latter case,  limited to business  proposals  with
which the Executive was familiar,  for the purpose of inducing any such existing
or prospective  customers or partners to reduce or forego using the insurance or
financial  services  business  of the  Corporation  within the United  States of
America.

                  (b) During the period  described  in  subparagraph  (a) above,
except when acting on behalf of the  Corporation or any affiliate  thereof,  the
Executive  shall not solicit any employee of the  Corporation  or any  affiliate
thereof to terminate his employment.

                  (c) During the period described in subparagraph (a) above, the
Executive  shall not (i) do or say anything that  reasonably  may be expected to
have the effect of diminishing or impairing the goodwill and good  reputation of
the Corporation  and its officers,  directors and products,  (ii)  intentionally
disparage or injure the  reputation  of the  Corporation  by making any material
negative  statements  about the  Corporation's  methods of doing  business,  the
effectiveness of its business  policies or the quality of any of its products or
personnel, (iii) make any substantive statements or issue any releases regarding
the internal  business  affairs of the Corporation or the  circumstances  of the
termination  of his  employment  to any member of the print or  broadcast  media
except  after   consultation   with  the   Corporation   and  after  giving  due
consideration  to the reasonable  suggestions  of the  Corporation in connection
with any such statements or releases.

                  (d) During the period described in subparagraph (a) above, the
Corporation  shall not (i) whether by  authorizing  or knowingly  condoning such
conduct by its  personnel,  intentionally  disparage the Executive or injure his
reputation by making any negative statement about him or his talents,  (ii) make
any substantive  statements or issue any releases regarding the circumstances of
the  termination  of the  Executives  employment  to any  member of the print of
broadcast  media except after  consultation  with the Executive and after giving
due  consideration to the reasonable  suggestions of the Executive in connection
with any  such  statements  or  releases.  The  foregoing  notwithstanding,  the
Corporation   may  publicly  or  privately  (i)  disclose  the  fact  that  such
termination  has  occurred,  (ii)  make  any  statement  that  conforms  to  the
announcement  previously issued within the Corporation (the terms of which shall
have  previously  been  furnished to the Executive for his  approval),  or (iii)
provide any disclosure required by applicable law, without obligation to consult
the Executive.

                  (e) In no event shall an asserted  violation by the  Executive
of the  provisions  of this  paragraph 4  constitute  a basis for  deferring  or
withholding  any amounts  otherwise  payable to the Executive  under this letter
agreement.

         5. This letter agreement is personal to Executive and without the prior
written  consent  of the  Corporation  shall  not  be  assignable  by  Executive
otherwise  than by will or the laws of descent  and  distribution.  This  letter
agreement shall inure to the benefit of and be enforceable by Executive's  legal
representatives.  This  letter  agreement  shall  inure to the benefit of and be
binding upon the Corporation and its successors.

         6. (a) This letter  agreement  shall be governed  by and  construed  in
accordance with the laws of the Commonwealth of Kentucky,  without  reference to
principles  of conflict of laws.  This  letter  agreement  may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

     (b) All notices and other  communications  hereunder  shall be given in the
manner set forth in the Existing Employment Agreement.

                  (c) The  invalidity  or  unenforceability  of any provision of
this letter  agreement  shall not affect the validity or  enforceability  of any
other provision of this letter agreement.

                  (d) The  Corporation  may  withhold  from any amounts  payable
under this  letter  agreement  such  Federal,  state or local  taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                  (e) Executive's  failure to insist upon strict compliance with
any  provision  of this letter  agreement  shall not be deemed to be a waiver of
such provision or any other provisions hereof.

                  (f)  This  letter   agreement  and  the  Existing   Employment
Agreement contain the entire understanding of the Corporation and Executive with
respect  to the  subject  matter  hereof and  thereof  and  supersede  all prior
agreements,  representations  and  understandings of the parties with respect to
the subject  matter hereof.  Except as expressly  modified or superseded by this
letter agreement, the Existing Employment Agreement is hereby reconfirmed in all
respects.



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         IN WITNESS WHEREOF,  Executive has hereunto set his hand and,  pursuant
to the  authorization  from its Board of Directors,  the  Corporation has caused
this letter  agreement  to be executed in its name on its behalf,  all as of the
date and year first above written.


                                                 PROVIDIAN CORPORATION



                                                 /s/ Irving W. Bailey II
                                          Chairman and Chief Executive Officer


Accepted and Agreed:



/s/ Shailesh J. Mehta
Shailesh J. Mehta