The private sector lender RBL Bank and consumer financier Bajaj Finance have mutually decided to discontinue the issuing of co-branded credit cards under their cooperation, as the synergies initially envisioned have undergone major modifications, the bank informed the exchanges.

"As a strategy, we aim to have a diverse origination channel. When we were growing, we were obtaining between 200,000 and 250,000 cards every month, but we've decreased this to 100,000 per month due to our own priorities of doing more with clients than just a card. This, along with a hard climate for unsecured retail, resulted in lower incremental sourcing. With a total base of over 5 million cards, the strategic need for this collaboration has lessened. As a result, this is the obvious solution for both parties," stated Jaideep Iyer, Head of Strategy at RBL Bank.

The bank will continue to service the cards issued to date, which total roughly 3.4 million. "RBL Bank will continue to service the existing portfolio of approximately 3.4 million co-branded credit cards issued under this partnership while ensuring seamless support and customer satisfaction across all its service channels," according to the lender.

According to the bank, cardholders of RBL-Bajaj Finance co-branded credit cards will remain RBL Bank customers and will be able to use their cards under the same terms and conditions as when they were issued.

Furthermore, the private sector lender has informed cardholders that they will receive the same advantages, incentives, and offers as their previous cards. However, when the cards are renewed, they will be reissued as RBL Bank-branded credit cards.

RBL Bank had increased slippages from the credit card segment during the July–September quarter as a result of their co-brand partner's collection services shift. The bank made the decision to internalize the collecting procedure in July. As overall provisions increased as a result of increased stress in the credit card and microfinance portfolios, RBL Bank reported a 24% drop in net profit.

The bank stated during its Q2 analyst call that it has been trying to lessen its need on a major co-branded partner in the credit card market for the last 18 months. In the past, the Bajaj Finance channel accounted for more than 60–70% of card purchases.

Through new co-brand alliances and direct channels, RBL Bank has greatly increased its capacity to issue credit cards throughout the past 18 months. Over the past year, the bank has reduced its reliance on co-brand card origination with Bajaj Finance, going from 126,000 cards in September 2023 to 37,000 cards in September 2024, the bank stated.

The bank has also stated that its move to sever ties with Bajaj Finance is consistent with its strategy to form a variety of alliances, including with consumer brands like IOC and IRCTC and NBFCs like Mahindra & Mahindra Finance and TVS Finance.

The RBL-Bajaj Finance co-brand has been one of the biggest and most fruitful co-brand partnerships in the nation, the bank stated, adding that it is still committed to expanding its credit card business as a major source of new customers.

According to recent data, as of October, there were 5.17 million credit cards outstanding from RBL Bank.