RBI Slaps Bajaj Finance With Notice on Co-branded Cards

Bajaj Finance Ltd., one of India’s leading non-banking financial companies (NBFCs), has reportedly received a “letter of displeasure” from the Reserve Bank of India (RBI) regarding its co-branded credit card operations.

The central bank has raised concerns over the company’s internal controls, risk management practices, and its role in co-branding arrangements with partner banks.

RBI Raises Concerns Over Risk and Internal Controls

As per reports, the RBI has criticised Bajaj Finance for not proactively identifying operational gaps and vulnerabilities, leading to significant risks for customers. The letter refers to an earlier communication dated 31st January and the company’s response on 22nd February, indicating that previous concerns had not been adequately addressed.

Further, the RBI has pointed out that Bajaj Finance has taken a reactive rather than a proactive approach in handling regulatory and compliance matters. The central bank also challenged the company’s assertion that its role was limited to customer solicitation, stating that Bajaj Finance holds internal responsibilities in co-branding arrangements and has access to sensitive customer data.

Regulatory Directives and Future Compliance Measures

The RBI has issued strict directives to Bajaj Finance to enhance oversight and compliance in its co-branded credit card business. The key directives include:

• Ensuring strict adherence to regulatory timelines.
• Seeking independent validation through an external audit, with prior approval from the RBI.
• Conducting audits covering data security, IT infrastructure, information security, and cybersecurity controls.
• Obtaining explicit approval from the RBI’s Department of Supervision before re-engaging in any co-branding arrangements.

Bajaj Finance Share Performance 

As of April 03, 2025, at 11:20 AM, Bajaj Finance share price is trading at ₹8,495.85 per share, reflecting a decline of 2% from the previous day’s closing price. Over the past month, the stock has registered a loss of 1.53%. 

Conclusion

Bajaj Finance had previously announced that it would cease the incremental sourcing of co-branded credit cards with RBL Bank and DBS Bank, although existing cardholders would continue to receive services from the respective banks. The latest RBI directive reinforces the importance of stringent compliance and proactive risk management in the NBFC sector, especially in partnerships involving financial services and customer data security.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.