In eight years, RBL Bank has become India’s fifth-largest issuer of credit cards. The pace of this expansion has been such that credit cards account for about 20% of its total loan book—2X than its larger peers. And all of this would not have been possible without Bajaj Finance.
The mutually beneficial co-branded partnership meant RBL had access to Bajaj Finance’s millions of customers, while the latter received a share in the profits. Of its 3.75 million issued credit cards, 2.75 million cards are co-branded with Bajaj Finance.
But now, faced with high exposure to credit cards, the bank is being forced to take its foot off the credit-card pedal. And that puts its partner Bajaj Finance into a tough spot.