Posted inEconomy
RBI’s Compliance Regulations Influence Co-branded Card Partnerships: Banking Sector Shifts Towards Collaboration with Established Fintech Firms
The tightening of compliance regulations by the Reserve Bank of India (RBI) has prompted banks to reassess their partnerships for co-branded card ventures. Concerns about non-compliance risks with RBI regulations, particularly with smaller fintech firms, have led banks to prefer collaborating with established fintech companies with a proven track record of regulatory adherence. Following amendments to credit and debit card rules by the RBI, certain banks, such as Federal Bank and South Indian Bank, have ceased issuing new co-branded credit cards. This regulatory shift underscores the importance of robust compliance systems and adherence to RBI directives for co-branded card partnerships. As a result, smaller fintech firms may face challenges in securing partnerships with banks for co-branded card ventures, while larger, stable fintech companies are positioned to benefit from this evolving landscape.