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MUMBAI: Equitas Small Finance Bank Ltd on Tuesday partnered HDFC Bank to launch co-branded credit cards, with plans to issue these cards to at least 20% of its eligible customer base in 12-18 months, a senior executive said.

“We have 4-5 lakh customers which is opportunity-centric towards cards, based on our own internal metrics through which we evaluate...At a product penetration level, at least two in every 10 customers should have our co-branded cards one year or 18 months from now — that is the approach within the qualified base with which we are moving forward," said Murali Vaidyanathan, senior president and country head (branch banking -liabilities, products and wealth) at Equitas Small Finance Bank.

Vaidyanathan said the bank will start with physical cards and then go towards virtual cards as well. “In phase two when we speak of end-to-end digital, we are looking at that in three to six months," he told reporters on Tuesday.

That said, the outstanding from these co-branded credit cards will reflect in the books of HDFC Bank as it will take care of the underwriting process under its existing policy.

“This will work on application programming interface (API) banking. There is no data flow or pushback into the HDFC system. We will pre-qualify accounts on first sight and then start selling it to our consumers. HDFC handles only the card side of the issue and they will have the details relevant to the card with them and nothing from liabilities or transactions will be reflected or seen on that side," said Vaidyanathan.

According to Parag Rao, group head (payments, consumer finance, digital banking and IT), HDFC Bank, there is a significant under-penetration of electronic payment instruments even now.

“Therefore, we have decided that competition and working with competition actually is a merit rather than a demerit and therein comes our strategy of partnerships with other banks," said Rao.

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