End of Bajaj Fin credit card includes non-event, pace of new sales to return in quarter: RBL Bank
After pulling the plug on its year-long credit card distribution tie-up with Bajaj Finance, RBL Bank may take one quarter to recover from new product sales, an executive said.
The private sector lender has been slowing its reliance on non-bank lenders over the past 18 months, but about 30 percent of its unique cards continue to be covered under the partnership, business head Bikram said. Yadav told PTI after the bank announced the end of the partnership.
Stressing that the development comes at a time when the credit card front is on alert due to concerns about unsecured lending, Yadav said the bank will take about a quarter to return to normal for new card sales. it did before.
“From April onwards, we will return to balances,” he said, stressing that the end of the bond would not be neutral from a revenue generation perspective.
About half of the cards sold by the bank are available through its distribution engine, where it has installed 3,000 employees dedicated to this work in the past 18 months, he said, adding that the unit’s economy is not changing.
Ending the bond will not lead to any movement in terms of the quality of the credit card portfolio, he said, pointing out that the asset selection was in the bank even below the combined credit card offering.
Chief strategy officer Jaideep Iyer said that henceforth the focus will be on selling credit cards to the 54-lakh potential customers.
He said that the credit card base, which includes 34 lakh customers with a combined offer spread by Bajaj Finance, spends up to Rs 10,000 crore per month and the bank would like to get a similar base for other offerings such as two-wheeler loans, gold loans, car loans and home loans.
Iyer said that during its peak 18 months ago, Bajaj Finance was distributing up to 80% of the cards sold by the bank in a month which has dropped by 30%.
“We have built the distribution muscle now which makes this (end of partnership with Bajaj Finance) a non-event now,” said Iyer.
He added that the bank is now the fifth largest player on the credit card front and the need to expand the base is not that high, therefore, the focus is on selling other products.
Yadav said the bank has become the partner of choice for affiliates and cited recent additions like IRCTC and Mahindra Finance, which will continue to ensure that card distribution continues.
