With the Reserve Bank of India (RBI) barring MasterCard from on-boarding new customers, credit card issuers including co-brand partners RBL, Yes Bank and Bajaj Finserv have been hit the most. In fact, the entire card schemes of these banks are linked to MasterCard, so they have been affected the most. Japanese brokerage Nomura said in its report that the RBI's move has affected these three entities the most.
Let us tell you that 60 percent of HDFC Bank card schemes are linked to Master Card, Amex and Diners, while it is around 35-36 percent in the case of Axis Bank and ICICI Bank. HDFC Bank is already unable to issue new cards, as RBI has put restrictions on the bank to issue new cards, hence it has less impact. Kotak's card portfolio, on the other hand, is completely linked to Visa, so it won't be a problem.
The management of both Axis Bank and ICICI Bank have in recent days been in discussions about their co-branded cards with Flipkart and Amazon, which are the fastest growing card schemes.
Nomura said that while Amazon's ICICI Card is affiliated with Visa, Flipkart Axis Card is affiliated with Mastercard and there is a potential medium-term risk, so the current situation should continue.
The central bank on Wednesday banned Mastercard Asia/Pacific Pte Ltd from adding new customers to all its card products (debit, credit and prepaid) with effect from July 22, 2021.
RBI had earlier imposed similar restrictions on both American Express Bank (Amex) and Diners Club International (Discover Financial Services).