NEW DELHI: The Reserve Bank of India’s decision to bar Mastercard from adding new customers in India would impact the pace of issuance of debit and credit cards in the immediate and medium term. The banks and financial institutions which are likely to be impacted most include RBL Bank, Yes Bank and Bajaj Finserv.
According to a report by Nomura, RBL Bank, Yes Bank, and Bajaj Finserv are most impacted as their entire card schemes are allied with Mastercard. HDFC Bank also has 60% of its card schemes tied to Mastercard, Amex and Diners, while for Axis Bank and ICICI bank, this is about 35-36%, says the Nomura report.
RBL Bank, in a statement issued on Thursday, has said that the bank’s current run rate of around 1 lakh new credit card issuances per month could potentially be impacted till there is clarity from the regulator on issuing new credit cards on the Mastercard network or till the technical integration with Visa is complete.
RBL Bank expects to start issuance of credit cards on the Visa payment network post the technology integration which is expected to take 8 to 10 weeks. According to the statement, RBL Bank has around 3 million credit card customers and is the fifth largest credit card issuer in the country with 5% market share.
A Yes Ban spokesperson, meanwhile, told The New Indian Express that for new credit card issuance, the bank is evaluating migration to other platforms for seamless transition.