By raising the risk weight on banks’ exposure to credit card debt, and cracking down on co-branded credit cards with lax due diligence, the central bank is looking to avert a credit card debt crisis, like the one the US could soon face.
The Reserve Bank of India is tightening its grip on cobranded credit cards, a recently booming sector. This stricter scrutiny aims to prevent unregulated entities from gaining backdoor access to the credit card industry.
The RBI has proposed higher liquid assets for housing finance companies, smaller aggregate deposits, and the ability to issue co-branded credit cards in a draft circular on reviewing the regulatory framework for HFCs.
HDFC Bank has distributed a million-plus cards with Tata Groups super app Tata Neu and around 120,000 with foodtech major Swiggy, two people in the know told ET.