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Ending Bajaj Fin credit card tie-up a non-event, pace of new sales to return in a quarter: RBL Bank
Having pulled the plug on its years-long credit card distribution tie-up with Bajaj Finance, RBL Bank may take one quarter to return to the pace of new sales of the product, a senior official has said.
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Bajaj Finance was distributing up to 80 per cent of the cards sold by the bank in a month which has now come down 30 per cent, said Iyer. Image source: Pixabay/Representational
Written By: PTI
Updated: Sun, Dec 01, 2024
07:55 PM IST
07:55 PM IST
New Delhi, PTI
Having pulled the plug on its years-long credit card distribution tie-up with Bajaj Finance, RBL Bank may take one quarter to return to the pace of new sales of the product, a senior official has said.
The private sector lender has been slowing down its reliance on the non-bank lender for the last 18 months, but about 30 per cent of the one lakh odd cards continue to be the co-branded ones under the partnership, its head of business Bikram Yadav told PTI after the bank announced an end to the partnership.
Underlining that the development also comes at a time when the overall environment on the credit card front is a bit cautious because of concerns over unsecured lending, Yadav said the bank will take about a quarter for getting back to the normal pace of new card sales that it was doing previously.
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"From April onwards, we will get back to the ratios," he said, stressing that the end of the tie-up will be neutral from an income generation perspective.
About half of the cards that the bank sells are sourced through its own distribution engine, where it has placed 3,000 dedicated staffers for the job over the last 18 months, he said, adding that the unit economics does not change.
Ending the tie-up will not lead to any movement on the quality of the credit card portfolio, he said, pointing out that the asset selection was with the bank even under the co-branded credit card offering.
Its head of strategy Jaideep Iyer said the focus from now on will be to sell more products from the bank's bouquet of offerings to the 54-lakh strong credit card customers.
He said the credit card base, which includes 34 lakh customers having the co-branded offering distributed by Bajaj Finance, spends up to Rs 10,000 crore a month and the bank would like to tap the same base for other offerings like two-wheeler loans, gold loans, auto loans and home loans.
Iyer said at its peak about 18 months ago, Bajaj Finance was distributing up to 80 per cent of the cards sold by the bank in a month which has now come down 30 per cent.
"We have built the distribution muscle now which makes this (end of partnership with Bajaj Finance) a non-event now," Iyer said.
He added that the bank is now the fifth biggest player in the credit card front and the need to grow the base is not that high, and hence, the focus is to sell more of other products.
Yadav said the bank has become a partner of choice for co-brand associations and listed out recent additions like IRCTC and Mahindra Finance, which will continue to ensure that the distribution of cards continues.
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