- These companies are now looking for alternatives.
- RBL Bank is in talks with Visa, but issuing cards under the new network would take 8-10 weeks.
- Yes Bank is evaluating a migration to other platforms for a âseamless transitionâ.
New Delhi: RBI’s restrictions on Mastercard will affect credit card issuance by a host of lenders, including RBL Bank, Yes Bank, Bajaj Finance, which have exclusive ties to the agency. Now these companies are looking for alternatives.
RBL Bank has informed the exchanges that around 1 lakh of new credit card issuance could be affected due to the RBI ban on Mastercard. The private-sector lender is in talks with Visa, but issuing cards under the new network would take 8-10 weeks, the India time mentioned in a report. RBL Bank owns 30 lakh of credit cards and is the fifth largest issuer with a 5% market share. A large part of its cards are issued by Bajaj Finserv under a partnership agreement.
Meanwhile, a Yes Bank spokesperson said You that for new credit card issues, the bank is evaluating a migration to other platforms for a âseamless transitionâ. He added that his debit cards are also available on Visa and RuPay platforms and new issues will not be affected.
Analysts say the inability to issue new credit cards could impact the growth of these banks as the pandemic has changed the dynamics of the payments industry. While discretionary shopping in malls and stores has declined, online shopping has accelerated.
The daily quoting an ICICI Securities research report mentions in the report that the restrictions will help improve the market share of the respective unaffected incumbents. âThe issuance of co-branded cards with Master-card will also stop due to the RBI restriction. If a particular Mastercard co-branded credit card has a high contribution to a player’s overall credit card mix, it will have a greater impact on the issuer’s business growth, âthe report says.
According to bankers, Visa will be the main market share winner, as banks have been reluctant to issue many RuPay credit cards, due to which its market share is still low. The domestic issuer is the market leader in bulk debit cards, however, but has yet to push spending.