Bajaj Finance and RBL Bank have ended their 8-year partnership for co-branded credit cards, causing a dip in shares for both entities. The apex lender, Reserve Bank of India, has raised concerns over co-branded cards, leading to mandatory approval for NBFCs every 2 years. The affected entities are now focusing on new partnerships and strategies for their credit card businesses, causing a bearish outlook for RBL Bank and a positive outlook for Bajaj Finance according to analysts. Stay updated with the latest business news and stock market updates on Zee Business, and utilize resources like the Income Tax Calculator to save money through our personal finance coverage.
Bajaj Finance and RBL Bank Sever Co-Branded Credit Card Partnership
Background:
Bajaj Finance and RBL Bank have had a long-standing partnership dating back to 2014. The co-branded credit cards issued under this partnership have been popular among consumers, offering a range of benefits and rewards.
Recent Developments:
In a recent development, Bajaj Finance and RBL Bank have announced the end of their co-branded credit card partnership. The decision is attributed to concerns raised by the Reserve Bank of India (RBI) over co-branded cards. The RBI has mandated that non-banking financial companies (NBFCs) must seek approval from the apex lender every two years to continue issuing co-branded cards.
Impact on Shares:
The announcement has led to a drop in share prices for both Bajaj Finance and RBL Bank. Analysts believe that the end of the partnership will have a bearish impact on RBL Bank, which has been heavily dependent on the co-branded cards for its credit card business. Bajaj Finance, on the other hand, is expected to benefit from the termination of the partnership as it will now have greater flexibility to explore new partnerships and strategies for its credit card business.
Top 5 FAQs and Answers:
1. Why did Bajaj Finance and RBL Bank end their partnership? A: Concerns raised by the RBI over co-branded cards, requiring NBFCs to seek approval every two years.
2. What are the implications for cardholders? A: Existing cardholders will continue to use their cards as before. However, there may be changes to benefits and rewards in the future.
3. How will this affect Bajaj Finance's credit card business? A: Bajaj Finance is expected to benefit as it gains flexibility to explore new partnerships and strategies.
4. What is the outlook for RBL Bank's credit card business? A: Analysts predict a bearish outlook due to the loss of co-branded cards, which have been a significant revenue source.
5. Will the RBI's concerns over co-branded cards impact other banks and NBFCs? A: Yes, other entities offering co-branded cards are likely to be affected and may need to seek approval from the RBI.
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