If you have ever applied for a "credit card" from a fintech app and later noticed, in the fine print, that the actual card issuer was a bank and not the NBFC whose brand name you saw everywhere, you have already brushed against the exact question this article answers. Can an NBFC issue its own credit card, entirely on its own, without a bank standing behind it?

The short answer is: yes, but only with prior written approval from the Reserve Bank of India, and only if the NBFC meets a strict set of eligibility conditions — chief among them a minimum net owned fund of ₹100 crore. Without this approval, an NBFC is legally barred from issuing debit cards, credit cards, charge cards, or any similar product, whether physical or virtual. This single rule, tucked into the RBI's Master Direction on Credit Card and Debit Card Issuance and Conduct, 2022, has reshaped how dozens of Indian fintechs and non-banking lenders design their card products.

But that one-line answer barely scratches the surface. The real story involves a regulatory history going back to 2004, a 2022 crackdown that forced several well-known fintech "credit cards" to redesign their business models overnight, and a nuanced difference between an NBFC issuing a card independently versus doing so through a co-branding arrangement with a bank. This guide walks through all of it in detail — the law, the practical roadblocks, the current market reality, and where things are headed.

What exactly is an NBFC, and how is it different from a Bank?

A Non-Banking Financial Company, or NBFC, is a company registered under the Companies Act that carries on the business of loans and advances, acquisition of shares, leasing, hire-purchase, or investment activities — but it is not a bank. NBFCs are regulated by the RBI under the RBI Act, 1934, and specifically under the Master Directions applicable to Non-Banking Financial Companies.

The critical distinction that matters for this discussion is that NBFCs cannot accept demand deposits the way banks do, and they do not have access to a Current Account Savings Account (CASA) pool of low-cost, stable funds. Banks fund their operations, including credit card receivables, partly through customer deposits. NBFCs, on the other hand, borrow from banks, issue bonds, or raise money through securitisation — all of which tend to be costlier and less flexible. This funding gap is not just a footnote; it is one of the central reasons the RBI has historically been cautious about letting NBFCs into the credit card business, and it is also why, even after approval, running a profitable NBFC credit card programme is harder than it looks.

NBFCs have nonetheless become indispensable to India's credit ecosystem. They are estimated to originate a substantial share of the country's overall credit, particularly to small businesses, gig workers, rural borrowers, and new-to-credit consumers whom traditional banks often find too risky or too expensive to serve. That reach is precisely why the credit card question matters so much — an NBFC with strong last-mile distribution could, in theory, put a genuinely useful credit card into the hands of millions of Indians who banks have overlooked.

What does "issuing a credit card" actually mean under RBI rules?

Before going further, it helps to be precise about what "issuing" means in regulatory terms, because this is where a lot of online confusion originates. Under RBI's framework, the "card issuer" is the entity that is contractually and financially responsible for the credit card — the one that underwrites the credit risk, sets the credit limit, bears the loss if the customer defaults, and is answerable to the RBI for compliance. Marketing a card, distributing it, or providing the app interface a customer swipes through is a completely different function, legally called being a "co-branding partner."

This distinction matters because a huge number of cards in the Indian market that look like they belong to a particular company are, on paper, issued by a bank, with the well-known brand acting only as a co-branding or distribution partner. Amazon Pay ICICI Credit Card, Flipkart Axis Bank Card, and the Bajaj Finserv RBL Bank SuperCard are classic examples; the recognisable brand sits in front, but a licensed bank is the legal issuer bearing the credit risk.

So can an NBFC issue a credit card on its own, without partnering with a bank?

Yes, and this is the part that has changed meaningfully in recent years. Under Para 4(d) of the RBI's Master Direction on Non-Banking Financial Company – Scale Based Regulation, and reinforced in the 2022 Master Direction on Credit Card and Debit Card Issuance, the RBI states clearly that an NBFC "shall not issue debit cards, credit cards, charge cards, or similar products, virtually or physically" without obtaining prior approval from the Reserve Bank. Read carefully, that sentence is not a prohibition — it is a conditional permission. The RBI is not saying NBFCs can never issue their own cards; it is saying they can, provided they first get the regulator's explicit sign-off.

Any company, including one that does not take deposits, needs a Certificate of Registration along with specific permission from the RBI to enter the credit card business, and the prerequisite for that is a minimum net-owned fund of ₹100 crore, along with any other terms and conditions the RBI may specify from time to time. In plain terms, an NBFC that wants to issue credit cards under its own name, bearing its own credit risk, must first prove it has the financial muscle, the governance structure, and the risk systems to be trusted with that responsibility — much the same bar that applies to a scheduled commercial bank wanting to enter the credit card business.

This effectively means there are two very different pathways for an NBFC to be involved in the credit card market:

1. Pathway one is standalone issuance — the NBFC itself becomes the legal card issuer, subject to RBI's direct approval and ongoing supervision. This is rare and reserved for large, well-capitalised players.

2. Pathway two is the co-branded route — the NBFC partners with a bank that already holds card-issuing rights, and the NBFC's role is restricted to marketing, distribution, and customer access to its own products and services. The bank remains the legal issuer and risk-bearer. This is, by a wide margin, the more common model today.

In short, the answer to "can an NBFC issue its own credit card" depends entirely on which of these two paths is being asked about:

• Standalone issuance — legally possible, RBI-approved, rare, and reserved for large, well-capitalised NBFCs.

• Co-branded issuance — the NBFC's brand appears on the card, but a bank is the actual legal issuer and risk-bearer.

• Neither is automatic — both routes require formal regulatory compliance; there is no version of card issuance in India that happens outside the RBI's direct oversight.

What are the RBI's eligibility criteria for standalone NBFC credit card issuance?

The eligibility bar is intentionally high, because a credit card programme carries real systemic risk — unsecured lending at scale, fraud exposure, and reputational risk if customers are mistreated. The table below summarises the core conditions an NBFC must satisfy before the RBI will even consider an application.

Meeting the net-owned-fund threshold alone does not guarantee approval. RBI evaluates the applicant's overall financial health, its track record in unsecured lending, its technology and cybersecurity posture, and its ability to service customers responsibly — a lesson learned from the fintech lending controversies of the past few years, where aggressive recovery practices by some digital lenders drew regulatory censure.

How did NBFCs access the credit card market before these rules were clarified?

It is worth understanding the history, because it explains why so much confusion still exists online about "NBFC credit cards." Since 2004, the RBI had told NBFCs in periodic circulars that they could, in principle, launch credit cards, but only after taking the regulator's permission first; the 2022 master direction did not invent a new rule so much as consolidate and restate an old one. For nearly two decades, almost no NBFC actually cleared that bar independently. Instead, the industry converged on the co-branded model, where a bank supplied the underlying card-issuing licence and balance sheet, while NBFCs and fintech companies supplied distribution, technology, and niche customer segments.

A parallel, more creative workaround also emerged in the 2018–2022 period: several fintech-backed NBFCs issued Prepaid Payment Instruments (PPIs) — essentially wallet-based cards — and then loaded them with a revolving credit line sourced from an NBFC lending partner. Startups such as Slice, Uni Cards, and PostPe operated in this regulatory grey zone, challenging the position of banks by attaching a credit line to what was technically a prepaid card rather than a true credit card. To the end user, the product felt and behaved exactly like a credit card — a physical card, a monthly bill, EMI options — but structurally it sat outside the credit card regulations altogether, in the more lightly regulated PPI framework.

Why did the RBI crack down on the prepaid card plus credit line model?

This workaround did not last. The RBI issued a notification restricting non-bank PPI issuers from loading their wallets with credit lines sourced from NBFCs, a move that sent shockwaves through companies such as Slice, whose PPI instrument was being loaded with credit from NBFC partners including DMI Finance, Lendbox, Liquiloans, and Northern Arc. The regulator's concern was straightforward: PPIs are meant to be prepaid instruments funded by the customer's own money, not disguised lending products. Allowing credit lines to sit inside a wallet blurred the line between payments regulation and lending regulation, and it let companies bypass the far stricter capital, disclosure, and conduct requirements that apply to genuine credit card issuance.

Following the June 2022 circular banning credit-line-backed prepaid cards, companies like Slice had to restructure their entire operating model within months to stay compliant. Most of these fintechs pivoted toward genuine co-branded credit card partnerships with banks — for instance, several moved to issuing actual credit cards through licensed bank partners rather than prepaid instruments — precisely because the co-branded route, unlike the PPI workaround, is explicitly recognised and permitted under RBI's card directions.

This episode is a useful cautionary tale for any NBFC or fintech evaluating how to enter the card business today: creative structuring around a regulatory grey area tends to work only until the regulator notices it, at which point the cost of unwinding the model — technologically, contractually, and reputationally — can be severe.

The key takeaways from this episode are worth keeping in mind:

• A PPI is meant to be funded by the customer's own prepaid balance, not by a hidden line of credit from an NBFC.

• Blending payments regulation with lending regulation created exactly the kind of opacity RBI moves to shut down.

• Companies that pivoted quickly to compliant, bank-backed co-branded cards recovered; those that delayed faced sharper disruption.

• The lesson generalises well beyond prepaid cards: any product structured to sit just outside a regulatory definition carries real unwind risk.

What is the difference between a co-branded card, a PPI-linked card and a True NBFC-issued card?

Because these three models are so often confused in casual conversation, a side-by-side comparison is genuinely useful.

The co-branded model remains, by far, the practical route for most NBFCs today, and RBI's own directions are explicit that the co-branding partner cannot market the card as its own product, must ensure the card issuer's name is explicit on the card, and that the co-branding arrangement itself must be in accordance with the card issuer's board-approved policy, with the card issuer remaining accountable for the co-branding partner's conduct.

Which NBFCs actually issue credit cards on their own in India today?

If the bar is this high, who has actually cleared it? For a long stretch, only two NBFCs issued credit cards independently — SBI Cards and BoB Financial Solutions, both of which sit within the state-run banking family, giving them access to capital, brand trust, and risk infrastructure that most private NBFCs simply do not have. In the past, three prominent NBFCs — Bajaj Finance, Tata Capital, and Reliance Capital — had also approached the RBI seeking permission to issue cards independently, reflecting genuine appetite among large, well-capitalised players.

More recently, analysts have suggested the regulatory door may be opening wider. Macquarie Research noted that after RBI tightened rules around data-sharing in co-branded arrangements — preventing co-branding partners from accessing cardholder transaction data — the regulator appeared more inclined to grant standalone credit card licences to large non-bank players such as Bajaj Finance, since NBFCs would then retain the underlying credit risk on their own balance sheets rather than through an opaque co-branding structure. That is a meaningful signal: RBI's caution has never really been about keeping NBFCs out of the card business altogether, but about making sure that whoever bears the credit risk is transparent, accountable, and adequately capitalised.

Well-known fintech brands like Slice, Uni Cards, and OneCard, despite their strong consumer recall, are not standalone card issuers in the strict regulatory sense. OneCard, for example, is operated by FPL Technologies Private Limited, which does not itself hold a card-issuing or PPI licence, and instead partners with banks such as IDFC First Bank, Federal Bank, South Indian Bank, and BOB Financial, with the bank formally acting as the issuer of the OneCard credit card. This is a good illustration of how consumer-facing brand strength and legal card-issuer status are two entirely separate things — a distinction that matters enormously for anyone doing due diligence on a fintech partnership or evaluating a company's actual regulatory exposure.

What practical challenges do NBFCs face even after getting RBI approval?

Clearing the regulatory bar is only the first hurdle. Running a credit card business profitably is a different challenge altogether, and several structural headwinds explain why so few NBFCs have pursued standalone issuance even where they could.

1. The cost of funds is the most fundamental constraint. NBFCs face a materially higher cost of capital compared to banks, which can draw on a low-cost pool of current and savings account deposits, whereas NBFCs must borrow at commercial rates. Credit card receivables are unsecured and revolve slowly, which means the spread an NBFC earns after funding costs can be thin, especially in the early years of a portfolio before scale kicks in.

2. Underwriting is also a genuinely different discipline. Credit card underwriting differs meaningfully from the kind of unsecured personal or business loan underwriting NBFCs are typically built around, because the entire sanctioned credit limit — not merely the amount a customer has spent — has to be treated and provisioned for as an exposure. That changes capital planning, provisioning norms, and the entire risk appetite conversation at the board level.

3. Then there is the economics of customer acquisition. With RBI's rules requiring card activation within a defined window, and typical customer acquisition costs running into thousands of rupees per card, a portfolio of cards that customers never activate or use meaningfully can quickly turn an expensive acquisition strategy unprofitable. Add to this the asset-quality risk that comes from serving new-to-credit customers — precisely the segment where NBFCs have historically added the most value, but also where default risk is hardest to predict using conventional bureau data.

4. Finally, the Merchant Discount Rate (MDR) — the fee that gets shared between the issuer, the acquiring bank, and the card network on every transaction — represents most of an issuer's transaction-linked revenue, and there has been ongoing regulatory and industry discussion about capping it, which would squeeze margins for any new entrant, NBFC or otherwise.

Taken together, the main hurdles an NBFC has to plan for are:

• Higher cost of funds than deposit-taking banks, which compresses margins on revolving credit.

• Different underwriting discipline, since the full sanctioned limit — not just the amount spent — counts as exposure.

• Expensive customer acquisition, with activation-window rules that can waste spend on unused cards.

• Asset-quality risk from serving new-to-credit customers with thin bureau history.

• MDR pressure, as regulatory discussion around capping this fee could squeeze issuer economics further.

What are the advantages of letting NBFCs issue credit cards independently?

Despite the challenges, the case for opening this door wider is compelling, and it goes beyond simply adding another competitor to the market. NBFCs have built genuine expertise and distribution reach in exactly the segments that traditional bank-issued credit cards have struggled to serve — small business owners, gig economy workers, residents of tier-2 and tier-3 towns, and first-time borrowers with thin or no credit history. A joint study by NITI Aayog and Mastercard had specifically argued that regulations should be made more "ownership neutral," allowing capable non-bank entities equal footing rather than restricting sophisticated credit products to banks alone purely on the basis of institutional type.

Independent NBFC issuance also promises product innovation. Digital-first card experiences, flexible EMI conversion at the point of sale, dynamic credit limits based on real-time cash flow data (particularly relevant for gig workers and small merchants), and vernacular-language customer service are all areas where nimble NBFCs, unencumbered by legacy banking technology stacks, have historically moved faster than incumbent banks.

The strongest arguments in favour of opening this space further include:

• Deeper financial inclusion, reaching tier-2/tier-3 towns, gig workers, and thin-file borrowers banks tend to skip.

• Faster product innovation, from dynamic, cash-flow-based credit limits to vernacular customer service.

• Healthier competition, which historically pushes down fees and improves customer service standards industry-wide.

• Better use of alternative data, since NBFCs often have more granular visibility into a customer's real income patterns than a bank's traditional bureau-based model.

How should an NBFC actually go about seeking the RBI's approval? 

For an NBFC seriously considering the standalone route, the process is neither quick nor informal. It typically involves several distinct stages, each requiring careful preparation well before any formal application reaches the regulator.

Because this process is long, resource-intensive, and uncertain in outcome, most mid-sized and smaller NBFCs find the co-branded route far more pragmatic — it lets them offer credit-card-like products to their customer base almost immediately, while a bank partner absorbs the regulatory and balance-sheet burden of formal card issuance.

What compliance obligations continue even after an NBFC is approved? 

Approval is not a one-time event; it comes with ongoing obligations that mirror what banks face. Card issuers must quote the annualised percentage rate for different situations such as retail purchases, balance transfers, cash advances, non-payment of the minimum amount due, and late payments, wherever these rates differ, to give customers full transparency on the true cost of credit. NBFCs issuing cards independently must also maintain robust systems around unsolicited card issuance, cardholder consent, billing disputes, and the RBI's broader fair-practices code — the same conduct standards that have, in recent years, led to regulatory action against several digital lenders for aggressive or opaque recovery practices. For an NBFC, building and proving this compliance infrastructure is often a more demanding, longer-term project than the initial capital requirement itself.

What does the future hold for NBFC-issued credit cards in India? 

The direction of travel is fairly clear, even if the pace is gradual. Industry analysts believe that RBI's move to tighten data-sharing rules in co-branded arrangements — by barring co-branding partners from accessing cardholder transaction data — is itself a signal that the regulator will become more comfortable granting standalone credit card licences to large, well-governed NBFCs, since it pushes issuers to retain full ownership of credit risk on their own balance sheets rather than through an indirect structure. As India's scale-based regulatory framework for NBFCs matures — with the largest NBFCs now supervised almost as closely as banks — it is reasonable to expect that a small number of top-tier NBFCs will eventually secure standalone card-issuing status, joining SBI Cards and BoB Financial Solutions in that category.

For the vast majority of NBFCs, though, the near-term reality will continue to be the co-branded model: partnering with a bank, contributing distribution and product design, and staying firmly within the marketing-and-distribution role that RBI's directions currently permit. Understanding this distinction — and structuring partnerships, disclosures, and customer communication correctly around it — is not just a compliance nicety; it is central to how an NBFC positions its card product in the market without running into regulatory trouble down the line.

Conclusion

The question "can an NBFC issue its own credit card" turns out to have a genuinely layered answer; legally possible, tightly regulated, financially demanding, and, in practice, achieved by only a handful of institutions so far. For most NBFCs, growth, distribution, and consumer credit strategy is still built around navigating co-branding partnerships, compliance with RBI's evolving Master Directions, and getting the underlying capital, governance, and risk architecture genuinely investor- and regulator-ready; long before a standalone card licence even becomes a realistic conversation.

This is exactly the kind of decision; where regulatory strategy, capital structuring, and finance operations all have to move together; that trips up otherwise capable NBFCs and fintech lenders. At GenZCFO, this is the everyday work: helping NBFCs and financial services companies build the fundraising narrative, compliance-ready financial systems, and CFO-level strategic clarity that RBI, lenders, and investors expect to see before they say yes to something as consequential as a credit card business. Whether you're evaluating a co-branded partnership, preparing your financials for an RBI application, or simply trying to understand what "credit-card ready" actually looks like on your balance sheet, having that kind of experienced financial guidance in the room early tends to save far more time; and far more regulatory back-and-forth; than figuring it out after the fact.

Frequently Asked Questions

Q1. Can any NBFC apply to issue its own credit card?

Ans. Not any NBFC — only one that is validly registered with the RBI, maintains a minimum net owned fund of ₹100 crore, and can demonstrate adequate risk management and governance systems before applying for specific RBI approval.

Q2. Is a co-branded credit card the same as an NBFC issuing its own card?

Ans. No. In a co-branded arrangement, a licensed bank remains the legal card issuer and bears the credit risk, while the NBFC's role is limited to marketing, distribution, and customer access — it does not issue the card in the regulatory sense.

Q3. Why can't fintech NBFCs simply load a prepaid card with a credit line instead of applying for card-issuing approval?

Ans. This workaround was common until mid-2022, when the RBI specifically restricted non-bank PPI issuers from loading wallets with NBFC-sourced credit lines, closing off what had become a popular but ultimately non-compliant structure.

Q4. Do SBI Cards and BoB Financial Solutions count as NBFCs issuing their own credit cards?

Ans. Yes, both are registered NBFCs that issue credit cards independently, and for many years they were the only two NBFCs to hold this status in India, largely due to their public-sector banking parentage and capital strength.

Q5. Will more NBFCs be allowed to issue credit cards independently in the future?

Ans. Regulatory commentary suggests the RBI is gradually becoming more open to granting standalone card-issuing approvals to large, well-capitalised NBFCs, particularly as recent rule changes push issuers toward retaining full ownership of credit risk rather than relying on indirect co-branding structures.