Axis Bank’s credit card issuances will see a 17-18% hit following the Reserve Bank of India’s (RBI) ban on global card network Mastercard.

The impact will be felt in the Flipkart co-branded credit card, which was launched in July 2019 and has 1.2 million such cards in force.

“We estimate an overall impact of 17-18% in terms of card issuance since the RBI imposed the ban on 22 July. If this continues in August, the impact could rise to 21-22%,” said Axis Bank president and head (retail lending and payments) Sumit Bali.

The RBI had on 14 July indefinitely barred Mastercard from onboarding new credit, debit or prepaid card customers from 22 July for failing to comply with its local data storage rules. In April, it placed similar restrictions on American Express Banking Corp. and Diners Club International Ltd.

“We are in engagement with Flipkart and Mastercard, who, in turn, are in touch with the regulator. On the basis of the understanding and the discussions we have had with partners and the networks, we do feel that post 15 September, the situation should be back to normal. That is the kind of visibility we have as of now," added Bali.

A regulation from April 2018 mandated all payments data from India to be stored in the country.

As of 30 June, Axis Bank had 7.2 million credit cards in force, up from 6.8 million a year ago. While credit card spends stood at Rs 14,785 crore in Q1 FY22, on a sequential basis there was a 13% drop in spends, although it rose 84% on a year-on-year (YoY) basis.

“We are not assuming that Mastercard will be back in business (by 15 September) as that is not something which we can comment on. All I said was by 15 September, even if Mastercard is not operational we should be in a position to come back to normalcy," said Bali.