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Banking industry

SBM Bank India Blocks Commercial Credit Cards Amid RBI KYC Compliance Drive

Strategic Insights

— 1 min read

SBM Bank India, the wholly-owned subsidiary of State Bank of Mauritius, has blocked all commercial credit cards it offered in association with fintech companies, effective April 1, following a Reserve Bank of India direction to update their 'know your customer' (KYC) details. This sudden move has left thousands of customers without access to their credit cards, with many complaining about inadequate notice. The blockage was implemented on the midnight of March 31, after which customers have been unable to transact with these cards.

Key Takeaways:

  • SBM Bank India has blocked all commercial credit cards offered in association with fintech companies, affecting over 90% of its 10 lakh credit cards.
  • More than 90% of SBM India's credit cards are backed by fintechs, with major partners like M2P, Karbonn, Enkash, and KODO being affected.
  • Customers have been told to update their KYC to avoid facing blocking, but many have complained about receiving insufficient notice, with some receiving only a three-hour window to update their details.
  • The bank has been under the RBI scanner for ignoring guidelines and engaging in activities such as crypto transactions alongside fintech partnerships.
  • Thousands of clients and startups have been unable to use their credit cards, as large banks do not serve startups with credit cards.

Statistics:

  • Over 90% of SBM India's 10 lakh credit cards are backed by fintechs (Source: Three people familiar with the development).
  • The bank has partners with major fintechs like M2P, Karbonn, Enkash, and KODO (Source: Fintech executive).
  • More than 90% of SBM India's credit cards are impacted by the blockage (Source: Three people familiar with the development).
  • Thousands of card holders have been locked out of their credit cards (Source: Second person).

Sources:

  • Three people familiar with the development
  • A fintech executive who runs a credit card business in tie-up with SBM India
  • A second person familiar with the matter

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