Federal Bank to Present Co-Branded Card Proposal to RBI

In March 2024, RBI banned Federal Bank and South Indian Bank from issuing new co-branded credit cards due to regulatory deficiencies. The Federal Bank plans to submit all the details of the corrective actions they have taken in response to concerns raised by the banking regulator about its co-branded cards in the next few days.

Shalini Warrier, executive director of Federal Bank said, “We are in the process of working through the details of what RBI has asked us to look at. We have worked through most of the details that need to be done. In the next few days, we will be going back to RBI and presenting our plan, indicating where the corrections have been made.”

She further added, “We do not expect too much of an implication either on the balance sheet or on the fee income. We will be going back to RBI and if all goes well, I am sure they will bless our resumption very shortly”.

Federal Bank has three co-branded credit cards – Federal OneCard, Federal Scapia, and Federal FI. The bank’s gross advances through credit cards increased to Rs 3,060 crore at the end of the March quarter, registering a year-on-year growth of 106%.

“I don’t believe either the regulator wants us to stop partnerships or we are looking at that direction,” said Shyam Srinivasan managing director & CEO, of Federal Bank. Following the statement released by the Federal Bank, people can expect the co-branded credit cards to be back in the market soon.

Bottom Line

Federal Bank introduced the Scapia credit card with no joining fee and offering exclusive benefits making it popular among credit card enthusiasts. But with RBI putting a stop to issuing new co-branded cards from the Federal Bank, people who are looking to apply for the Scapia and Fi CoBranded Credit Cards shall now have to wait until this ban is lifted before getting their new cards. Meanwhile, the OneCard Credit Card can still be availed as other banks issue it.