Credit Card Alert: Why RBL Bank, Bajaj Finance Will Stop Issuing New Co-Branded Credit Cards?

In major news for credit card holders, private sector lenders RBL Bank and Bajaj Finance have decided to stop the issuance of new co-branded credit cards to customers. However, the existing credit cards will continue to function as usual without any change, as per the latest filing on Friday, November 29, 2024.

The announcement was intimated to stock exchanges in the late evening of November 29.

RBL Bank revealed that they and Bajaj Finance have been in discussion over the last month. And they felt that synergies through this co-brand partnership have undergone significant change over time.

In the filing, RBL Bank said, " It was therefore decided to stop issuance of new co-branded credit cards under this partnership. This does not materially change the Bank's plans for its credit cards business."

Here's what will happen to the existing co-branded credit cards of RBL Bank and Bajaj Finance:

- RBL - BFL co-brand cards issued to date will continue to operate as usual without any change.

- Also, cardholders of RBL - BFL co-branded credit cards will continue to be the customers of RBL Bank as they were hitherto and can continue to use their cards on the same terms and conditions as at the time of the issuance of such cards.

- There will be no change in the benefits offered by the existing RBL - BFL co-branded credit cards. As per RBL, customers will enjoy the same benefits, rewards, offers etc. associated with their existing cards.

- However, after the expiry and upon the renewal of these cards, they will be reissued as RBL Bank-branded credit cards.

"RBL Bank will continue to service the existing portfolio of approximately 3.4 million cobrand credit cards issued under this partnership while ensuring seamless support and customer satisfaction across all its service channels," RBL said.

It needs to be noted that RBL Bank has already taken measures of reducing its dependency on co-branded credit cards with BFL over the last 18 months.

It said, "Over the last 18 months, RBL Bank has significantly expanded its credit card issuance capabilities through both direct channels and new co-brand partnerships. The Bank has minimized the dependence on the origination of co-brand cards with BFL over the last one year.."

That being said, RBL has reduced its issuance of co-branded credit cards with Bajaj Finance to merely 37,000 cards in September 2024, compared to the issuance of 1,26,000 in the month September 2023.

RBL said that the decision is in line with the Bank's plan to build a diverse range of partnerships including with NBFCs such as Mahindra & Mahindra Finance Limited, TVS Finance Limited as well as consumer brands like IOC, IRCTC. The Bank remains focused on growing its credit card business as a prominent customer acquisition engine.

Notably, the RBL-BFL co-brand has been one of the largest and most rewarding co-brand relationships in the country. The success of this partnership has been based on dedicated efforts from both partners. The Bank acknowledges BFL's contribution to this partnership.

The share prices of RBL Bank and Bajaj Finance will be in focus next week.