RBL Bank plans to keep up its co-branded credit card ties with its biggest partner Bajaj Finance, said chief of the credit card business Bikram Yadav. The lender has around 48 percent of its co-branded credit book with Bajaj Finance.
“Bajaj finance has an important co-brand relationship that the bank has and the partnership will continue to run,” Yadav said.
To be sure, there were news reports in December last year about the central bank expressing concerns about the co-branded partnership between the bank and the last consumer non-bank. Apparently, the co-branding contract between the two parties has been extended only for a year by the regulator and is set to end by December.
According to Yadav, a large part of RBL Bank's credit card issuance out of this co-brand arrangement may be distributed to other channels as part of the bank's de-risking strategy. “We are investing in our own bank branches and branch-led issuance and we have put a little focus on that. The concentration that earlier was there with Bajaj will come down a little bit, but they will continue to be an important element in our issuance strategy,” Yadav added.
Other than the branch-led focus, the bank had in the past few months brought in more co-branded partners and partnerships which will now get a bigger share of the pie.
“There is a whole series of new partnerships that we have done over the last six to nine months. These include TVS Credit, DMI Finance, IRCTC and Indian Oil. We are in the process of signing with Patanjali Group,” he added.
The bank, Yadav said, is growing slower than the industry as the focus is on getting quality customers leading to less delinquencies. “We are going for the right type of customers with the right product and the customer is acquired through a very deliberative process which contributes better to the overall economics,” Yadav said. RBL Bank is growing its credit card book at 15 percent compared to 18 percent for the industry.
On the credit card front, RBL’s peak delinquencies came from new customers who have been associated for 12 to 18 months, Yadav said. “The peak delinquencies usually come from customers which we have sourced in the past 12 to 18 months,” he said. The bank in its investor presentation said that it had reported some high delinquencies due to tighter control on new bookings. Its delinquencies were near 4 percent for the quarter ended June 2024, nearly the same as last year.
The bank had on August 1 launched a credit card on the unified payments interface (UPI) platform with National Common Mobility Card (NCMC) service. Here Yadav said that the bank’s customers can now experience the ultimate flexibility and ease of making payments, be it for daily expenses or during travel, all consolidated in one card.
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