Bajaj Finance Ends Co-Branded Partnership With DBS Bank India

"Bajaj Finance Limited and DBS Bank India Limited have agreed to discontinue the issuance of new co-branded credit cards," the Indian subsidiary of the Singapore-based bank said in a statement, responding to NDTV Profit's queries.

The two lenders have so far issued 5 lakh credit cards as part of their partnership. The disclosure comes on the back of RBL Bank's announcement on Friday that it has decided to mutually call off its co-branded partnership with Bajaj Finserv Ltd.

"For the existing customers of the Bajaj Finserv DBS Bank SuperCard, there is no disruption of services. They continue to access all existing benefits, privileges, and services that they enjoy with the current card," DBS Bank India said in its statement.

According to a person with direct knowledge of the matter, the non-bank lender has decided to exit co-branded card partnerships altogether, as regulatory norms make such businesses less attractive.

The Reserve Bank of India master direction announced in March that co-branded card partners can only work on marketing and sourcing initiatives in such deals. All other processes shall be handled by the bank partners.

Previously, co-branded card partners could claim sourcing and collection fees from bank partners. In these, collection service fees formed a bulk of the fee income from such deals. With the new norms, that option stands closed.

Bajaj Finance has a card portfolio of around 40 lakh credit cards through co-branded partnerships. Of this, RBL Bank accounted for nearly 35 lakh cards as of September 30.

On Friday, RBL Bank said that it had called off the partnership with Bajaj Finserv as synergies through this co-brand partnership have undergone significant change over time. Over the last year, RBL Bank has been bringing down its reliance on Bajaj Finserv to source new credit customers, the bank said.

As a share of total credit cards at RBL Bank, the Bajaj Finserv partnership accounted for 41% as of September 30. This is lower than the 65% ratio reported a year earlier.

"Bajaj Finance Limited and DBS Bank India Limited have agreed to discontinue the issuance of new co-branded credit cards," the Indian subsidiary of the Singapore-based bank said in a statement, responding to NDTV Profit's queries.

The two lenders have so far issued 5 lakh credit cards as part of their partnership. The disclosure comes on the back of RBL Bank's announcement on Friday that it has decided to mutually call off its co-branded partnership with Bajaj Finserv Ltd.

"For the existing customers of the Bajaj Finserv DBS Bank SuperCard, there is no disruption of services. They continue to access all existing benefits, privileges, and services that they enjoy with the current card," DBS Bank India said in its statement.

According to a person with direct knowledge of the matter, the non-bank lender has decided to exit co-branded card partnerships altogether, as regulatory norms make such businesses less attractive.

The Reserve Bank of India master direction announced in March that co-branded card partners can only work on marketing and sourcing initiatives in such deals. All other processes shall be handled by the bank partners.

Previously, co-branded card partners could claim sourcing and collection fees from bank partners. In these, collection service fees formed a bulk of the fee income from such deals. With the new norms, that option stands closed.

Bajaj Finance has a card portfolio of around 40 lakh credit cards through co-branded partnerships. Of this, RBL Bank accounted for nearly 35 lakh cards as of September 30.

On Friday, RBL Bank said that it had called off the partnership with Bajaj Finserv as synergies through this co-brand partnership have undergone significant change over time. Over the last year, RBL Bank has been bringing down its reliance on Bajaj Finserv to source new credit customers, the bank said.

As a share of total credit cards at RBL Bank, the Bajaj Finserv partnership accounted for 41% as of September 30. This is lower than the 65% ratio reported a year earlier.