Can NBFCs issue credit cards?

No, NBFCs cannot issue credit cards on their own.

But there’s a workaround. And that’s where most confusion starts.

First, what is an NBFC?

NBFC stands for Non-Banking Financial Company.

NBFCs offer loans, EMIs, investments, and credit products.

What they don’t do is function like full banks.

They don’t accept savings accounts.

They don’t issue debit cards.

And traditionally, they don’t issue credit cards either.

Why NBFCs cannot issue credit cards directly

Credit cards fall under strict banking regulations.

Only banks licensed by the Reserve Bank of India are allowed to issue credit cards directly.

NBFCs operate under a different regulatory framework.

So even if an NBFC lends money, it still can’t issue a standalone credit card in its own name.

Then how do NBFC-backed credit cards exist?

Good question.

NBFCs issue credit cards in partnership with banks.

Here’s how it works:

• A bank is the official card issuer
• The NBFC manages customer acquisition, rewards, or underwriting
• The card runs on a bank license

Legally, the card belongs to the bank.

Operationally, the NBFC plays a big role.

That’s the structure.

Why NBFCs want to issue credit cards anyway

Credit cards are powerful tools.

They help with:

• Customer stickiness
• Repeat usage
• Data-driven credit decisions

NBFCs already understand credit behaviour.

Cards fit naturally into their ecosystem.

Partnerships make that possible without breaking rules.

Are NBFC-issued cards different from bank cards?

From a user point of view, not much.

They work like normal credit cards:

• Monthly bills
• Due dates
• Interest charges
• Credit score impact

The difference is mostly in branding and reward structure.

Risk rules still come from the issuing bank.

Recent regulatory clarity

Over time, RBI has tightened rules around co-branded cards.

This ensures:

• Clear accountability
• Strong consumer protection
• Transparent disclosure

NBFCs cannot bypass banking rules.

Partnerships must follow strict guidelines.

Things to check before applying for such cards

Quick tip. Always check:

• Who the issuing bank is
• Who handles billing and disputes
• Interest rates and fees
• Customer support responsibility

Brand name alone doesn’t tell the full story.

FAQ

Can an NBFC issue a credit card independently?

No, only banks can issue credit cards.

Are NBFC-bank co-branded cards safe?

Yes, if issued under RBI guidelines.

Does such a card affect credit score?

Yes, just like any other credit card.

In short

NBFCs cannot issue credit cards on their own.

They can issue them through bank partnerships.

The bank license is what makes it legal.

Still unsure who actually issues a credit card being offered?