RBL Bank aims to grow in credit cards, launches offering with Indian Oil

Private sector lender RBL Bank is aiming to grow its credit card portfolio "moderately" and focus on other aspects like cross-selling to customers, a senior official has said.

If the industry grows at 20-25 per cent, the lender would like to increase its credit card outstanding by up to 15 per cent, its business head for credit cards Bikram Yadav said.

"We would grow moderately in this segment, and we'll focus on internal unit economics and customer engagements and deeper cross-sell with them," Yadav added.

Yadav, who was speaking after the launch of a dedicated offering in association with the largest oil marketing company Indian Oil Corporation, christened 'Xtra Credit Card', added that the other factors are more important than growth for the bank and its focus is on "reasonable" returns on the capital it deploys.

 

It can be noted that the credit card segment has been under the spotlight because of the RBI's discomfort around the riskier unsecured segment growing fast.

"The RBI is doing everything that is required to slow the growth," he said, pointing out to the hike in risk weights on the category in November 2023.

He said the bank is not keen on increasing its market share in the credit card segment, which stands at about 5 per cent, nor is it exiting the segment.

On personal loans, which form another important part of the unsecured lending book along with credit cards, Yadav said the bank does not solicit new customers with the offering and added that it prefers to see such loans to existing customers or those who are coming to branches soliciting a product.

The bank is currently adopting a multi-pronged approach to its credit cards business, which includes developing a field team to push the bank-branded cards, looking for synergistic opportunities with state-owned companies for co-branded offerings like the ones with railway tickets-focused IRCTC and IOCL, partnering with consumer brands, such as Patanjali, and also tie-ups with non-bank lenders and fintechs, he said.

Under the newly launched proposition, an individual customer will be able to get a value back equivalent to 7.5 per cent of the spends, when made at an IOCL station, while for others it will be 1 per cent, Yadav said.

There are over five variants of the card, which is priced at Rs 1,500 apiece, he added.

Admitting that the fuel category is very competitive among lenders because of its repeat use, Yadav said the bank's focus is to offer sharper products, which pull the customers and make it the card of choice.

Currently, the fuel category represents over 10 per cent of the overall spending for RBL Bank against 7-8 per cent earlier, he said, adding that this increase is par with the industry and driven by factors like people driving more, expensive fuel and upgrades to 4-wheelers from 2-wheelers.