RBI bars Federal, South Indian Bank from issuing co-branded credit cards

South Indian Bank has one co-branded credit card in partnership with the State Bank of India (SBI), available in two variants: SimplySAVE and Platinum

Following the directions by the Reserve Bank of India (RBI) on Tuesday, private sector lenders Federal Bank and South Indian Bank stopped issuing co-branded credit cards to new customers on account of regulatory deficiencies, according to exchange filings. 

South Indian Bank said that it will not onboard new customers on their co-branded credit cards until it is fully compliant with directions under RBI Master Direction on Credit Card and Debit Card issuance. However, the lender added that it will continue to service the existing customers who hold co-branded credit cards. South Indian Bank has one co-branded credit card in partnership with State Bank of India (SBI), which is available in two variants SimplySAVE and Platinum.

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On March 7, the RBI released a Master Direction on “Amendment to the Master Direction — Credit Card and Debit Card — Issuance and Conduct Directions, 2022. According to the notification, co-branded cards should explicitly indicate that the 

card has been issued under a co-branding arrangement with clear mention of the card-issuer.”
 

“The co-branding partner shall not advertise/market the co-branded card as its own product. In all marketing/ advertising material, the name of the card-issuer shall be clearly shown,” the amended directions noted.

In a separate exchange filing, Federal Bank informed the exchanges that post a letter from the RBI the lender has stopped issuance of new co-branded credit cards due to regulatory deficiencies and the bank is rectifying the areas of concern.

The bank also added that it will continue to service the existing customers.  

Federal Bank has three co-branded credit cards – Federal Onecard, Federal Scapia, Federal FI.