RBI says Bajaj Finance has not proactively identified gaps and vulnerabilities in its co-branded cards business, and also flagged the significant risk it poses to customers

Non-banking finance company (NBFC) major Bajaj Finance has received a “letter of displeasure” from the Reserve Bank of India (RBI) over its co-branded credit card business.

According to a report by CNBC-TV 18, the RBI’s letter says Bajaj Finance has not proactively identified gaps and vulnerabilities in its co-branded cards business, and also flagged the significant risk it poses to customers. The RBI said Bajaj Finance has more of a reactive approach and the NBFC fails to maintain adequate internal controls. Letter also contests Bajaj Finance’s claim that its role was limited to customer solicitation.

The RBI said Bajaj Finance cannot absolve itself of its responsibility to its partner banks and customers that it has an internal role in co-branding arrangements and access to sensitive customer data.

The RBI said Bajaj Finance must obtain explicit approvals from the RBI’s Department of Supervision, if it intends to re-engage in co-branding arrangements. The regulator also mandated the NBFC to monitor and ensure adherence to timelines, seek independent validation through external audit with prior RBI approval. The audit must cover data security measures and IT/IS/Cyber Security controls.  

Last year, Bajaj Finance had mentioned that it will cease incremental sourcing of co-branded credit cards with RBL Bank and DBS Bank. To be sure, the regulator in November 2023 barred the NBFC from sanctioning and disbursing loans under its “eCOM” and “Insta EMI Card” products due to non-compliance with digital lending guidelines, specifically the non-issuance of Key Fact Statements (KFS). The ban was lifted in May last year. 

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Published on April 3, 2025