RBI authorises the largest private sector lender by assets to issue new credit cards
A senior official at HDFC Bank stated on Monday that the bank is aiming to reclaim market share by number of cards in the coming year. The RBI this Thursday authorised the largest private sector lender by assets to issue new credit cards, more than eight months after it was barred from doing so owing to recurrent technological failures.
Parag Rao, its group head for payments and consumer finance, digital banking and IT told reporters that the bank has set some milestones for itself as it seeks to re-enter the market.
The first is to achieve monthly new credit card sales to 3 lakhs, the number right before the ban in November 2020, Rao said, adding that the same will be achieved in three months. Two quarters after that, it aims to take the monthly new card sales to 5 lakh a month, Rao said, adding that in three to four quarters from now, it plans to regain the market share by number of cards.
Rao added that during the ban, the bank lost its market share by number of cards but was able to maintain the market share on initiatives taken to prod users to spend.
It can be noted that as per data, the bank's market share by number of cards had come down by around 2 percentage points to under 25 per cent, as smaller rivals including ICICI Bank and SBI Cards seized the opportunity to close the gap.
After the lifting of the ban, HDFC Bank had spoken about coming back with a bang. Rao said spends on credit cards are 60 per cent higher in the April-June quarter on its card portfolio.
The bank will depend on its internal set of customers to grow the number of cards and is also looking at partnering with key players as Paytm announced earlier in the day, to increase its sourcing.
Rao also said that the conservative approach on the credit front will continue for the bank even as it goes aggressively on the new business sourcing. The bank scrip was trading 0.57 per cent up at Rs 1,522.95 apiece on BSE at 1318 hrs as against gains of 0.43 per cent on the benchmark.