RBL Bank, Bajaj Finance Stop Issuing New Co-Branded Credit Cards

RBL Bank Ltd. and Bajaj Finance Ltd. on Friday have stopped issuing new co-branded credit cards. The companies agreed to this decision on Friday after discussions over the past month. They identified changes in their partnership that affected their collaboration.

RBL Bank stated that this change will not impact its credit card business. Existing co-branded cards will continue to function as normal, and cardholders will remain customers of the bank.

As of Sept. 4, Bajaj Finserv co-branded cards made up 41% of the total cards issued by RBL Bank.

Bajaj Finserv's co-branded cards were 25-30% of monthly card issuances, Bikram Yadav, head- credit cards at RBL Bank told NDTV Profit.

"We will continue to service existing cardholders from the Bajaj Finserv partnership. The partnership was closed as a co-branded card partnership is no longer part of the partner’s strategy," Yadav said.

This has come as RBL Bank is also looking to build a diversified base of co-branded partnership.

It should cover the shortfall in issuances of credit cards in two-to-three months with other partners. He said that the bank aims to have only 10-15% share from individual co-branded partners.

Customers will keep the same benefits with their current cards, which can be reissued as RBL Bank branded credit cards upon renewal.

RBL Bank will manage the existing portfolio of around 3.4 million co-branded credit cards. The bank will provide support and maintain customer service across all channels.

Over the last 18 months, RBL Bank has increased its credit card issuance through direct channels and new partnerships. The bank has reduced its dependence on co-branded cards with Bajaj Finance. In September 2023, it issued 126,000 co-branded cards, which fell to 37,000 by September 2024.

This decision matches RBL Bank’s plan to form diverse partnerships, including those with non-banking financial companies such as Mahindra & Mahindra Finance Limited and TVS Finance Limited, as well as companies like Indian Oil Corporation.

In December, NDTV Profit reported that the Reserve Bank of India raised concerns regarding the co-branded credit cards issued by RBL Bank with Bajaj Finserv. The RBI granted a one-year extension to the partnership, rather than the two years requested by Bajaj Finance. Normally, banks do not need special approval to issue co-branded cards. In 2021, RBL Bank extended the partnership by five years.

Non-banking financial companies must seek RBI approval every two years for such arrangements. The RBI allowed a two-year extension in 2021 but has now given just a one-year extension for this partnership.