Fintech Collaborations Help Smaller Banks Win More Credit Card Customers in FY26

Smaller private and small finance banks expanded their credit card businesses at a faster pace in FY26, supported by partnerships with fintech companies, according to Moneycontrol, citing Reserve Bank of India (RBI) data. These collaborations helped lenders acquire new customers, particularly first-time credit card users. 

Under these partnerships, banks issue co-branded credit cards, while fintech platforms manage customer acquisition, marketing, and user engagement. Many of the new cardholders were new-to-credit (NTC) customers who had previously relied on UPI and debit cards for digital payments. 

Smaller Banks Record Strong Credit Card Growth 

Federal Bank expanded its credit card portfolio by 88% during FY26, adding over 10 lakh cards. The growth was largely driven by partnerships with OneCard and travel-focused fintech Scapia.  

The bank also increased its market share by 0.76 percentage points, with nearly 70% of new card issuances coming through fintech partnerships, as per its investor presentation. 

Utkarsh Small Finance Bank, through partnerships with super.money and PhonePe, added nearly 2 lakh credit cards during FY26, resulting in portfolio growth of almost 200%. 

Meanwhile, Unity Small Finance Bank, in partnership with BharatPe, issued over 2 lakh credit cards during the year after having no credit card business in FY25. 

Read More: UPI And Personal Loans are Replacing Credit Cards in Indians’ Wallets: CIBIL Report 

Private Banks Increase Market Share 

Data from credit bureau Equifax, as cited by Moneycontrol, showed that private banks' share of the credit card market increased to 58% in FY26, up from 46% in FY24, marking a gain of 12 percentage points. 

In contrast, SBI Cards and BOB Cards together lost around 12 percentage points of market share during the same period. 

The total number of credit cards in circulation rose 12% year-on-year to 11.9 crore in March 2026, compared with 10.6 crore a year earlier. The share of new-to-credit customers in overall credit card issuances also increased by 0.3 percentage points. 

According to Moneycontrol, quoting Abhinav Thakur, Senior Vice President and Head of Data and Analytics at Equifax India, private sector banks continued to lead new-to-credit card acquisition, increasing their share by 12 percentage points compared with the previous financial year. 

Large Banks Continue to Dominate 

Despite the rapid growth among smaller lenders, HDFC Bank, SBI Cards, ICICI Bank and Axis Bank remained the country's largest credit card issuers in absolute terms, operating at a significantly larger scale than their smaller peers. 

Conclusion 

Fintech partnerships played a key role in expanding credit card adoption among smaller private and small finance banks during FY26. By leveraging digital platforms to acquire customers, these banks recorded faster portfolio growth while increasing their presence in India's growing credit card market. 

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