RBI asks these two banks to stop adding customers to co-branded credit cards

Lenders did not reveal reasons cited by central bank (representative)

Mumbai:

The Reserve Bank of India has asked South Indian Bank and Federal Bank to stop adding new customers to its co-branded credit cards, the banks said in separate filings with stock exchanges on Wednesday.

South Indian Bank said it has been asked to stop onboarding any new customers on its co-branded credit cards until regulatory guidelines are followed. The company said it will continue to serve existing customers.

Federal Bank said it has been asked by the Reserve Bank of India (RBI) to stop issuing new co-branded credit cards.

“The bank is correcting areas of deficiencies and will seek regulatory clearance before resuming new issuances,” CBA said.

The lender did not reveal the reason cited by the central bank but said the directive follows recent changes in credit and debit card rules.

As part of these rules, the RBI reiterated that credit card co-branding partners cannot access customer data or be involved in any process after the first issuance of the card.

The banks did not specify in their exchange filings whether the restrictions imposed on them were due to a violation of this provision or other conditions.

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