Users are upset with travel credit card firm Scapaia because it has lowered credit limits

Users are upset with travel credit card firm Scapaia because it has lowered credit limits

Users are upset with travel credit card firm Scapaia because it has lowered credit limits

Federal Bank, a financial partner of Scapia, has mandated that the business lower credit limits for dormant customers.

The action was taken at a time when companies offering travel credit cards are having trouble because of regulatory intervention.

customers on social media reacted negatively to Anil Goteti's travel credit card business Scapaia, which was founded by the former CEO of Flipkart, when the company lowered a group of customers' credit limit by around 70–80%, alleging minimal use. had supplied.

According to sources who spoke with Moneycontrol, Federal Bank, the credit card startup's banking partner, has notified the firm to lower credit limits by 70–80% for customers who are inactive or have fewer transactions.

A person with knowledge of the situation said, "The move may have affected perhaps 150-200 users so extensively and it has been done only for those users and she have not touched their cards regardless of their status for not less than 10 days." % limit has been used.

Scapia remained silent about the event.

Many users claimed that the restriction was lowered abruptly on X (previously Twitter).

Anil Goteti, the former senior vice president of Flipkart, introduced the credit card on November 7 after raising $23 million in a Series A fundraising round headed by Elevation Capital and Binny Bansal's firm 3State Ventures.

Tanglin Venture Partners and Matrix Partners India, two of its current investors, also participated in this round.

It now offers credit cards via a partnership with Federal Bank, but it also intends to add other financial partners.

Another industry insider said, "Banks often engage in this approach. The credit limit will be decreased if a user is not using the card."

The action was taken at a time when companies offering travel credit cards are having trouble because of regulatory intervention.

The travel card startup Niyo's worldwide credit card was impacted when the Reserve Bank of India (RBI) ordered State Bank of Mauritius (SBM) India to cease all transactions under the Liberalized Remittance Scheme (LRS).

Concerning themselves that their money was stalled in route, several individuals voiced their worries.

On November 16, the RBI requested that institutions raise the risk weight associated with commercial banks' exposure to consumer loans from 25% to 125%.

In a similar vein, the risk weight of NBFCs has risen from 25% to 25% and that of scheduled commercial banks' credit card receivables, which previously had a risk weight of 125 percent, has now climbed to 150 percent.

Founded in 2023, Scapia provides users with an app and co-branded credit card to turn everyday purchases into incentives. These awards translate into Scapaia coins, which may be used to make online reservations for lodging and travel.

With a minimal monthly expenditure requirement, Scapia's co-branded card offers cardholders unrestricted domestic lounge access, 0% foreign exchange markup, and no joining or yearly fees.

Federal Bank was not reachable for comment; remarks will be added to the narrative at a later time.