OneCard Under RBI Scanner; New Card Issuance Suspended Across Banks
In what is a major setback for fintech unicorn OneCard, the Reserve Bank of India (RBI) has reportedly asked all its partner banks to stop issuing co-branded credit cards with the startup.
According to an ET report, the RBI sent letters to every partner bank, asking them to pause new OneCard issuances until the company addresses certain concerns.
Inc42 has reached out to OneCard for comments on the development, the story will be updated based on responses.
Important to mention that OneCard works with several banks, including BOB Cards, SBM India, Federal Bank, CSB Bank, South Indian Bank and Indian Bank. These lenders issue the cards, while FPL handles customer acquisition and management.
The move comes at a time when the central bank has been tightening its noose around co-branded credit cards. Over the past year, several banks have been told to pause or rework similar partnerships to meet the revised norms.
In March 2024, Federal Bank and South Indian Bank disclosed that the RBI had asked them to halt their co-branded programmes.
Many partnerships were later redesigned to comply with new rules.
Founded in 2019 by former ICICI Bank executives Anurag Sinha, Vibhav Hathi and Rupesh Kumar, OneCard has raised more than $111 Mn from investors including Peak XV Partners, QED Holdings and Hummingbird VC.
It became a unicorn in 2022 after a $100 Mn investment from Temasek valued the company at about $1.3 Bn. At present, the company is in the middle of raising a fresh funding round from Better Tomorrow Ventures, Peak XV and Z47.
OneCard’s operating revenue jumped 163% to INR 1,425.58 Cr in FY24. Despite this surge, losses barely narrowed, with fintech posting a net loss of INR 401.15 Cr.
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