Fintech

RBI questions Federal Bank on OneCard partnership as fintech scrutiny continues

Pratik Bhakta

January 30, 2023 | 8 Min Read

Bank-fintech partnerships, which were set to define India’s evolving finserv ecosystem, are coming under tremendous scrutiny from the country’s banking regulator. As a result it is hurting a fledgling industry.

In 2022, India’s fintech ecosystem was thrown into a tizzy when the Reserve Bank of India (RBI)—the country’s central bank—focused its attention on the sector. The RBI tightened the regulatory screws around digital lending, restricting credit flow through prepaid cards and co-branded credit cards.

Now, RBI is taking a closer look at the bank-fintech partnerships that have helped the sector grow by leaps and bounds. Two people in the know of things told The CapTable that Federal Bank has received additional queries from the RBI regarding the nitty gritties of its partnership with Pune-headquartered OneCard.

Currently, OneCard runs a co-branded credit card programme powered by the Kochi-headquartered private sector lender. While OneCard acquires and manages the customer, Federal Bank underwrites the loan and owns the card rails.

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