DCB Bank , in collaboration with fintech platform ZET, has introduced a groundbreaking co-branded secured credit card on the RuPay network. This innovative financial product aims to bridge India's credit gap by targeting first-time borrowers and underserved customers.

Key Features of the DCB Bank-ZET Secured Credit Card

Addressing India's Credit Gap

The partnership between DCB Bank and ZET comes at a crucial time for India's financial landscape:

• Nearly half of Indian adults remain outside the formal credit system
• Only about 90 million credit card users in a credit-eligible population of over 400 million

Advantages of the Secured Credit Card Model

For Banks

• Risk mitigation through fixed deposit collateral

For Customers

• Accessible entry point to formal credit

Market Reach

• Digital onboarding through ZET enables penetration into smaller towns and semi-urban markets

This innovative approach to credit card issuance could potentially revolutionize access to formal credit in India, especially for those who have been traditionally underserved by the banking sector. By combining the security of a fixed deposit with the flexibility of a credit card, DCB Bank and ZET are offering a unique solution that could help millions of Indians build their credit history while enjoying the benefits of modern digital banking.

As the financial landscape continues to evolve, such partnerships between traditional banks and fintech platforms may become increasingly common, driving financial inclusion and expanding access to credit across India.

The Reserve Bank of India (RBI) has granted approval for a significant transaction involving DCB Bank Limited, potentially reshaping the bank's ownership structure. The central bank has given the go-ahead for Aga Khan Fund for Economic Development S.A. (AKFED) to acquire 60,58,394 equity shares of DCB Bank through a preferential issue.

Key Details of the Approval

Implications for DCB Bank

This move is set to increase the promoter ownership in DCB Bank, with AKFED being one of the bank's promoters. The transaction comes with specific conditions laid out by the RBI:

1. The acquired shares will be subject to a lock-in period of five years from the date of completion of the acquisition.
2. These shares cannot be encumbered under any circumstances during the lock-in period.
3. AKFED's aggregate holding in the bank must not exceed the post-allotment level at any time.
4. If AKFED's holding falls below 5%, prior RBI approval will be required to increase it to 5% or more of the bank's total paid-up share capital or voting rights.

Regulatory Compliance

The approval is contingent on compliance with various regulatory frameworks, including:

• Banking Regulation Act, 1949
• Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies (January 16, 2023)
• Foreign Exchange Management Act, 1999
• Securities and Exchange Board of India regulations

Next Steps

DCB Bank has announced that it will proceed with the necessary steps to allot up to 60,58,394 equity shares to AKFED. This process will be carried out in accordance with the applicable provisions of the Companies Act, 2013, SEBI regulations, and other relevant laws.

The bank's management, led by Company Secretary & Compliance Officer Rubi Chaturvedi, has formally communicated this development to the stock exchanges, ensuring transparency in the process.

This strategic move by AKFED to increase its stake in DCB Bank could potentially influence the bank's future direction and governance structure. Stakeholders and market observers will be keenly watching how this development unfolds and its impact on DCB Bank's operations and market position in the coming months.