Travel tech credit card start-up Scapia has slashed credit limits for a bunch of its users, which has caused a backlash for the firm on social media platforms.

Multiple Scapia card users across X and other social media platforms raised concerns about this sudden decision. Some of the users saw their limits being reduced from a whooping ₹8 lakh to ₹20,000.

“Our credit limits for all products including credit cards are determined by various factors. As part of our periodic review, we have revised limits for some customers as per the bank’s credit card usage guidelines. The bank notified these customers whose limit was revised through email and SMS as per our regular practice. These revisions are not permanent and will continue to happen dynamically, reflecting both increases and decreases as per standard industry practices,” a Federal Bank spokesperson said.

However, industry experts said that credit limits are decided by the banking partners and not by fintechs.

Risk weights

Recently, the RBI asked institutions to increase the risk weights concerning consumer credit exposure of commercial banks by 25 per cent to 125 per cent.

Similarly, credit card receivables of scheduled commercial banks, which attract a risk weight of 125 per cent, have been hiked to 150 per cent while NBFCs’ risk weights have been hiked by 25 per cent to 125 per cent.

Founded in 2023 by former Flipkart executive Anil Goteti, Scapia issues co-branded credit cards in partnership with Federal Bank and an app for customers to turn their daily expenses into rewards. These rewards turn into Scapia coins, which can be utilised to book hotels and flights online.

The Bengaluru-based start-up has raised $32 million from the likes of Matrix Partners India and Elevation Capital. In November, it raised $23 million in a fresh round of funding led by Elevation Capital and Flipkart cofounder Binny Bansal’s Three State Ventures.

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