Bajaj Finance, RBL Bank fall as RBI grants only 1 more year to co-branded credit cards

The RBI has not yet allowed NBFCs to launch credit cards, so most of the non-bank financiers have opted for the co-branded route. Bajaj Finance has credit card partnerships with RBL Bank and DBS Bank. While the DBS Bank partnership is one year old, the one with RBL Bank is a long-standing one that started in FY18.

As per RBL Bank's FY23 annual report, it is among the largest credit card issuers in India with over 5 percent market share in cards in force (CIF). Analysts at Motilal Oswal estimate that co-branded cards with Bajaj Finance account for 60-65 percent of RBL Bank's total credit card issuances.

Bajaj Finance has been facing the heat from the RBI of late. The central bank had on November 15 asked it to stop sanction and disbursal of loans under its two lending products - eCOM and Insta EMI Card - with immediate effect over non-issuance of key fact statements to the borrowers under these two lending products.

Also read: RBI risk weight norms on consumer loans could impact NBFCs

The RBI has also been wary of the rise of unsecured consumer loans in the system. It recently increased the risk weight on such loans, which also includes bank lending to NBFCs. As a result, NBFCs like Bajaj Finance will see an impact on the lending as well as borrowing side.

The company reported a consolidated net profit of Rs 3,551 crore for the July-September quarter of this year, up 28 percent from year, while analysts had predicted a 30 percent on-year increase in net profit.