RBL Bank sees impact on RBI restrictions to issue new cards under Mastercard network

The Reserve Bank of India (RBI) imposed restrictions yesterday on Mastercard Asia / Pacific Pte. Ltd. (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021. We await further information from Mastercard on RBI's supervisory action. RBL Bank currently issues credit cards on the Mastercard network only.

The debit and prepaid cards issued by the Bank are already enabled on other payment networks in addition to the Mastercard network.

Separately, RBL Bank Limited("RBL Bank") has entered into an agreement with Visa Worldwide Pte. Limited ("Visa") yesterday 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. In the interim, our Bank's current run rate of approx. 100,000 new credit card issuances per month could potentially be 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.

As of date RBL Bank has approx. 3 million credit card customers and is the fifth largest credit card issuer in the country with approx. 5% market share.

Shares of RBL Bank Ltd was last trading in BSE at Rs.218.8 as compared to the previous close of Rs. 219.3. The total number of shares traded during the day was 174313 in over 1924 trades.

The stock hit an intraday high of Rs. 221.5 and intraday low of 218.05. The net turnover during the day was Rs. 38321400.

Source : Equity Bulls

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