Regulatory Changes Prompt Federal Bank and South Indian Bank to Halt Co-Branded Credit Card Issuance

Federal Bank and South Indian Bank have announced the cessation of issuing co-branded credit cards due to recent regulatory amendments by the Reserve Bank of India (RBI). These changes are part of the RBI’s modifications to the master direction for credit and debit card issuance and conduct rules.

Federal Bank, which previously offered three co-branded credit cards in partnership with OneCard Scapia Technology Pvt. Ltd and FI Brand Pvt Ltd, primarily targeting the younger generation, stated its commitment to rectifying deficiencies highlighted by the RBI before seeking regulatory approval to resume new card issuance.

In response to a letter from the RBI dated March 12, 2024, Federal Bank confirmed the suspension of new co-branded credit card issuance, as stated in a regulatory filing. As of December last year, Federal Bank’s gross advances through credit cards amounted to Rs 2778 crore, with co-branded credit cards contributing significantly to this figure.

Similarly, South Indian Bank affirmed its compliance with the regulatory directives, announcing the suspension of onboarding new customers for co-branded credit cards until full compliance is achieved.

Both banks emphasized their continued dedication to serving existing customers who hold co-branded credit cards issued by them. This decision underscores the banks’ commitment to regulatory adherence and customer service, ensuring compliance with the updated guidelines while maintaining support for current cardholders.