In April 2022, the RBI said that NBFCs can only get into the credit card business with prior approval.
Non-banking financial companies (NBFCs) have written to the Reserve Bank of India (RBI) seeking clarity on norms to issue credit cards on their books, Shriram Finance Executive Vice Chairman Umesh Revankar told FE in an interaction.
“The RBI is yet to come out with proper rules for credit card issuance. They have said they are okay with it, but they are yet to frame proper guidelines. We did ask (the regulator) and they are coming out with proper rules,” he said.
In April 2022, the RBI said that NBFCs can only get into the credit card business with prior approval.
He also added that the NBFC does not have any immediate plans to apply for a universal bank licence. However, it will take a call later on, depending on the macro- economic conditions and the encouragement they get from the regulator.
“As of now, we don’t have any such plans (to apply for banking license). But tomorrow or the day after tomorrow, depending upon the environment, depending upon the encouragement from the regulator, our decision can change,” he said.
Shriram Finance is currently the second largest NBFC after Bajaj Finance with total assets under management (AUM) of Rs 1.93 trillion as of June end, according to the NBFC’s Q1FY24 investor presentation. Commercial vehicles dominate the overall loan mix at the NBFC with nearly 50% share, followed by passenger vehicles and construction equipment’s which accounted for 19% and 8% of overall loans, respectively.
