New Delhi, March 28 -- The Reserve Bank of India (RBI) is tightening its scrutiny of the credit card industry. Recently, it asked Federal Bank and South Indian Bank to stop issuing new co-branded credit cards. Mint explains the regulator's concerns around such cards.

These are hybrid credit cards issued by a bank through a tie-up with a brand. There are of two types: one is issued in partnership with retail merchants and the other is issued in partnership with fintech companies. These cards offer customers benefits in the form of rewards or loyalty points. Travel, fuel and e-commerce are the three major sectors under which co-branded credit cards are issued-for instance, ICICI Bank-Amazon Pay card or HDFC Bank-Swiggy card. Typically, co-...