Shares of private lender RBL Bank declined 3.1 per cent to Rs 212 a piece on the BSE on Thursday after banking regulator Reserve bank of India (RBI) on Wednesday barred global card player Mastercard Asia/Pacific Pte Ltd from onboarding new domestic customers on its network from July 22 over non-compliance with local data storage guidelines.
RBL Bank currently issues credit cards only on Mastercard payment network and has approximately 3 million credit card customers. It is the fifth largest credit card issuer in the country with approximately 5 per cent market share.
The shares, however, recovered after the lender informed the exchanges that it entered into an agreement with Visa Worldwide Pte. Limited last on Wednesday to issue credit cards enabled on the Visa payment network.
“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,’ it added. READ HERE
At 10:19 AM, the stock was quotng 0.8 per cent lower at Rs 217 apiece as against a 0.22 per cent rise in the benchmark S&P BSE Sensex.
That said, RBL Bank expects its current run rate of nearly 100,000 new credit card issuances per month to be potentially impacted till such time that there is clarity from the regulator on issuing new credit cards on the Mastercard network or till the technical integration with Visa is complete.
On an aggregate basis, there were over 900 million debit cards in India as on May 31, 2021, of which over 400 million were issued by Mastercard, banking industry sources indicate. Credit card outstanding as on May 31, 2021, was over 62 million, latest data released by RBI showed. Credit cards are mostly issued with Mastercard and Visa – the former’s main competitor globally and in India – though public sector banks – who are not significant players in the credit card market – also issue home grown Rupay card of National Payments Corporation of India (NPCI).