The Reserve Bank of India (RBI) has directed fintech firm OneCard to stop issuing co-branded cards with its partner banks. The RBI has sent letters to these banks, asking them to pause new OneCard issuance until concerns are clarified regarding how customer data is being shared between OneCard and its banking partners. Over the past few years, the RBI has also instructed several banks to stop or revise similar partnerships.
OneCard’s partner banks include BOB Financial, SBM India, Federal Bank, CSB Bank, South Indian Bank, and Indian Bank.
Earlier the RBI has asked Federal Bank and South Indian Bank to put a halt on their co-branded card programmes. They later redesigned their partnerships to comply with the updated norms.
The RBI has stated that the restrictions are temporary but will remain in place until OneCard and its partner banks implement the required corrective measures. The RBI is expected to review OneCard’s remediation progress before allowing the company to resume issuing cards.
OneCard has acknowledged the directives issued by the RBI and said they are working closely with their partner banks to ensure full compliance.
The RBI is expected to lift the restrictions only after verifying the corrective actions.
What is a OneCard Credit Card?
OneCard is a metal credit card issued in partnership with various banks in India, such as Federal Bank and South Indian Bank. It is a co-branded card combining fintech and banking capabilities. It offers features like instant virtual card access, spending controls for online and offline transactions, and reward points that do not expire.
Impact on OneCard
The immediate effects of the RBI’s action include the suspension of new card issuance. OneCard will also face increased regulatory reporting requirements. New applicants cannot be approved, and marketing and onboarding campaigns are paused. This may reduce customer trust and negatively affect OneCard’s brand image. Though the existing cardholders won’t be having any issue, they can easily access their card.
Bottom Line
The RBI order directing OneCard to halt card issuance is a significant regulatory moment for India’s fintech and credit card ecosystem. It reflects stricter expectations around compliance and customer protection. The suspension is temporary, and issuance can resume once the RBI is satisfied with the revised compliance framework. OneCard is expected to continue working with its partner banks to resolve the identified gaps.