branded credit cards

Federal Bank

13/03/2024 12:56

MUMBAI, March 13 (Reuters) - India's central bank has
asked South Indian Bank  SIBK.NS  and Federal Bank  FED.NS  to
stop adding new customers to their co-branded credit cards, the
lenders said in separate stock exchange filings on Wednesday.
    South Indian Bank said it has been asked to stop on-boarding
any fresh customers in its co-branded credit cards until it
complies with regulatory guidelines. It will continue servicing
existing customers, it said.
    Federal Bank said it has been asked to halt the issuance of
new co-branded credit cards by the Reserve Bank of India (RBI). 
    "The Bank is in the process of rectifying the areas that are
deficient and will seek regulatory clearance prior to resumption
of new issuance," Federal Bank said.
    The lenders did not disclose the reasons cited by the
central bank but said the directive follows a recent change in
rules for credit and debit cards.
    As part of those rules, the RBI reiterated that co-branding
partners of credit cards cannot access customer data or be
involved in any of the processes after the initial issuance of
the cards.
    The banks, in their filings to the exchanges, did not
specify whether the restrictions placed on them were due to a
breach of this provision or another condition.   
         

 (Reporting by Ira Dugal; Editing by Sonia Cheema)
 ((Ira.Dugal@thomsonreuters.com; +91-9833024892;))