the wholly-owned subsidiary of foreign lender State Bank of Mauritius (SBM), has blocked the corporate credit cards it offered in partnership with several fintech players in India following a Reserve Bank of India (RBI) diktat to update their ‘know your customer’ (KYC) details, multiple people privy to the development told VCCircle.
Several credit card holders complained of receiving the email from the bank just a few days prior and some received it merely hours before the cards were blocked for use, SBM Bank stated that ‘We would like to bring to your kind attention that your Kodo SBM Corporate Card will be on hold, temporarily, with effect from the midnight of 31st March 2023, for want of reKYC’. None of their customer service numbers or emails responded after that. It is shocking that they would suddenly just block our cards without prior notice,” said a fintech executive who runs a debt lending platform.
- Several credit card holders complained of receiving the email from the bank just a few days prior and some received it merely hours before the cards were blocked for use from midnight of 31 March.
SBM Bank India, the wholly-owned subsidiary of foreign lender State Bank of Mauritius (SBM), has blocked the corporate credit cards it offered in partnership with several fintech players in India following a Reserve Bank of India (RBI) diktat to update their ‘know your customer’ (KYC) details, multiple people privy to the development told VCCircle.
Several credit card holders complained of receiving the email from the bank just a few days prior and some received it merely hours before the cards were blocked for use from midnight of 31 March. SBM Bank stated that ‘We would like to bring to your kind attention that your Kodo SBM Corporate Card will be on hold, temporarily, with effect from the midnight of 31st March 2023, for want of reKYC’. None of their customer service numbers or emails responded after that. It is shocking that they would suddenly just block our cards without prior notice,” said a fintech executive who runs a debt lending platform.
Another executive said this is the primary card being used by thousands of startups and fintech clients who may face difficulties in doing transactions: “There is no substitute as large banks do not serve startups with credit cards.”
The impact is across all major fintech with credit card offerings in partnership with SBM India, such as M2P, RazorPay, KODO, Karbon, and EnKash whose customers’ cards were blocked in a sudden move. Most of these fintech counts venture capital and other private investors.
A majority of the 10 lakh credit cards issued by SBM Bank have been blocked. As on February 28, SBM’s total credit card outstanding stood at 10.33 lakh, RBI data showed.
Some cardholders also complained that none of their customer care services responded till over the weekend and had suffered a failure of transactions that were linked to the cards.