Federal Bank has announced the acquisition of a selected credit card portfolio of 450,000 cards from Standard Chartered Bank India. Federal Bank will be buying the StanChart Indian credit card book at an undisclosed amount.

Currently StanChart India has 800,000 non-co-branded credit cards and 1.3 million co-branded cards. From this portfolio, the Federal Bank is going to acquire a credit card portfolio.

According to the reports, Federal Bank has agreed to acquire over 450,000 cards from Standard Chartered Bank India. For this deal the portfolio is valued at 1.5–1.6 times implied equity under the deal. 

For this deal the amount finally paid will actually depend on the balances outstanding at the time of transfer. According to the Bank, it has  800,000 non-co-branded and 1.3 million co-branded credit cards. 

The bank said receivables in its non-co-branded credit card business are expected to rise by around 90% following the transaction. 

The final size of the transferred portfolio, including the number of cards, will depend on the timing of the transfer and customer approvals, the bank said.

After the completion of the purchase, Federal Bank expects an increase in business and greatly increased its footprint in the Tier-1 cities. This transaction will also increase its customer pool.

As of now Federal Bank has more than two million credit card customers and with this deal its customer base will increase significantly.

In the previous year, Standard Chartered sold its Indian personal loan business to Kotak Mahindra Bank at a deal value of  $488m at the time.