Credit cards approval to the NBFCs not on RBI mind at the moment

A host of fintechs with an nbfc licence such of slice, uni and lazypay are issuing prepaid cards through tie-ups with banks. For players like these, an rbi nod to issue credit cards will assist amplify their services (representative photograph)
The reserve bank of india (rbi) is presently “not looking” at clearance to non-banking financial companies (nbfcs) to issue credit cards,

“The matter of allowing NBFCs to issue credit cards not on the table right now,” one of the sources said.

Nbfcs now distribute credit cards of banks they have tie-ups with, instead of issuing their personal cards.

Earlier in february, sources had instructed that the rbi changed into possibly to allow a few nbfcs to issue credit  cards, but with stringent conditions that could restrict the number of corporations to simplest those with a strong balance sheet.

India is a marketplace with low credit-card penetration of 3-4 percentage. Banks additionally focus at the so-known as prime or super-prime customers, creating a huge pool of indians ineligible for those credit lines, which nbfcs and fintech start-ups are looking  to tap.

Up to now, handiest nbfcs — sbi card and bob card, each within the state-run space — issue credit cards.

At the cease of november 2021, there had been 67 million credit cards, in comparison to 934 million debit cards, that is to be seen against the nearly 550 million customers who have credit score bureau histories, the ultra-modern rbi month-to-month bulletin of january 2022 stated.

Significantly, a bunch of fintechs with an nbfc licence inclusive of slice, uni and lazypay are issuing prepaid cards through tie-ups with banks. For players like those, an rbi nod to issue credit score cards will help increase their services.

Nbfcs do no longer appear to be too eager to release their credit cards and prefer to consciousness on conventional lending merchandise though the significant financial institution has allowed them to achieve this.

In master recommendations issued in april, the rbi had said nbfcs with minimal net-owned fund of rs one hundred crore can release their branded credit cards, furnished they have regulatory approval. As of august, massive nbfcs, together with bajaj finance, l&t finance, m&m finance and shriram delivery finance, were but to move in that direction.