Federal Bank Resumes Co-branded Credit Card Issuance with Scapia
Private sector lender Federal Bank has officially restarted its co-branded credit card issuance in collaboration with Startup Fintech Scapia. This move comes after a one-year hiatus due to regulatory restrictions.
Resumption of Operations
According to sources familiar with the matter, the Reserve Bank of India has granted permission for Federal Bank to recommence its co-branded credit card program. “The bank has initiated its partnership with Scapia, and additional collaborations might be on the horizon,” stated one of the informants.
Scapia’s Role in the Partnership
Scapia has been actively promoting the credit card for nearly a month. Anil Gateti, founder of Scapia, confirmed the startup’s re-engagement with Federal Bank to issue such cards. “This collaboration is pivotal for our expansion in the market,” he noted.
Background on the Regulatory Pause
Last year, on March 13, both Federal Bank and South Indian Bank made regulatory disclosures indicating a suspension of co-branded card issuance. This regulatory intervention significantly impacted fintech companies, including those based in Bengaluru, which were directly involved in this market.
Fintech Landscape and Future Prospects
The revitalization of this co-branded card initiative is expected to bolster Scapia’s operations. The company is also currently in discussions to secure a notable funding round, aiming to raise between $30 to $40 million in equity. This would mark Scapia’s second major institutional funding round, following a successful $23 million raise in November 2023.
Innovative Offerings from Scapia
Founded in 2022 by Gateti, who previously served as Vice-President at Flipkart, Scapia specializes in travel credit cards designed with benefits tailored for holidaymakers. Gateti aims to create a holistic travel ecosystem for younger consumers, leveraging the credit card as a tool for customer acquisition and offering an array of travel-related services.
Implications for the Fintech Sector
The resumption of activities within this segment is a positive development for the broader fintech industry. Federal Bank has made necessary adjustments in its issuance protocols and subscription systems to align with the updated regulatory guidelines, ensuring increased oversight and compliance.
Market Trends and Future Outlook
According to RBI data, there were approximately 108 million credit cards in circulation by January 2025, reflecting a 9% increase from the previous year. This growth follows a decline in new card programs induced by stricter regulatory measures aimed at combating inappropriate lending practices. The renewed issuance of co-branded cards signals a potential recovery in this sector as banks adapt to evolving compliance standards.