The Reserve Bank of India (RBI) last week authorized HDFC Bank, India’s largest private sector lender by assets, to issue new credit cards after being barred from doing so for almost eight months owing to frequent technological disruptions.
According to a senior official, the lender plans to reclaim market share by the number of cards within the next year.
According to a source, HDFC Bank has put out an ambitious plan to more than double the monthly card issue beginning in September, after the central bank lifted a temporary ban placed on HDFC in December.
The bank’s group head for payments and consumer finance, digital banking, and IT, Parag Rao has also informed the reporters that the bank has set some goals for itself as it prepares to re-enter the market. Rao further stated that HDFC bank was the first to reach a monthly sale of 3 lakh new credit cards just before the ban in November 2020 and that it intends to increase monthly new card sales to 5 lakh within two-quarters of the ban.
The lender hopes to reclaim its market share in terms of card numbers in three to four quarters.
Parag Rao, the bank’s group head for payments and consumer finance, also stated that despite losing market share due to the ban on issuing new credit cards, the bank was able to maintain market share due to steps done to encourage people to spend.
HDFC market share by the number of cards had dropped down by around 2% points to under 25% during the ban period and smaller rivals including ICICI bank and SBI cards seized the opportunity to close the gap.
HDFC bank had promised to return with a boom after the restriction was lifted. Spending on credit cards increased by 60% in the April-June period, according to Rao.
To enhance its sourcing, the bank will rely on its internal group of clients, as well as partnerships with significant entities such as Paytm, which was revealed earlier in the day. Rao also stated that the bank’s cautious approach to loans will remain, despite its aggressive approach to new business sourcing.
At 1318 hours on the BSE, the bank scrip was trading 0.57 percent higher at Rs 1,522.95 per share, vs 0.43 percent gains on the benchmark.