Mumbai: The Reserve Bank of India (RBI) has issued a letter of "displeasure" to Bajaj Finance, citing the failure of the NBFC to identify potential risks to customers in its co-branded credit card business, according to media reports. The letter, dated January 31, criticised the non-bank lender for failing to proactively address critical gaps. Bajaj Finance responded to the regulator on February 22.

According to the report, RBI has said that Bajaj Finance had an integral role in co-branding agreements and did not buy its argument that its role was limited to customer solicitation. A query sent to Bajaj Finance remained unanswered until Thursday press time.

Bajaj Finance, which partners with RBL Bank and DBS India for co-branded credit cards, reported that these products were the top source of customer complaints in FY24, accounting for 1,605 grievances, according to its latest annual report.

The company had a co-branded credit card base of 3.7 million as of December 31, 2024.

However, in the third quarter of FY25, it mutually agreed to halt new sourcing of co-branded credit cards with both banking partners.