HDFC Bank maintains top position in credit card biz; all set to come back with a bang
While the bank has lost some market share in the credit card business, the good news is it has maintained its pole position in the card issuance
HDFC Bank is doing its homework well. The RBI ban on selling new credit cards is yet to be lifted. However, India’s largest bank has laid out its comeback plan to stay ahead in the game. It has also submitted with the central bank a short-term and long-term roadmap and a comprehensive investment plan to tackle the technical issues.
“We have used the last six months to introspect, re-engineer and innovate about the cards business,” says the bank’s head of consumer finance, digital banking and information technology, Parag Rao to PTI.
“We have got very aggressive plans to get back in the market with a big bang… You will rapidly see HDFC Bank not just regaining market share, but also significantly increasing our spend market share,” he adds.
Notably, the RBI had barred HDFC Bank from issuing new credit cards and other digital products after frequent technical glitches on its digital platform. The ban was imposed in December 2020.
Management view
Talking about tech issues at an event in June, Sashi Jagdishan, MD and CEO, HDFC Bank highlighted that the bank continues to work with the RBI to resolve the issue and at the same time build more robust platforms.
“While tech-outages are a normal business risk for any bank/ financial company, bank could have built a system to ensure faster recovery here. On the fintech side, bank plans to build partnerships with platforms that can help to bring together scale (from bank) and seamless experience (from fintech platforms),” says Jagdishan in an investor call hosted by global brokerage Jefferies.
While the bank has lost some market share in the credit card business, the good news is it has maintained its pole position in the card issuance. Data from the RBI shows it had 1.49 crore cards outstanding by April-end, followed by SBI Cards at 1.19 crore. By comparison, ICICI Bank and Axis Bank had 1.07 crore and 72 lakh cards outstanding, respectively. Among
HDFC Bank’s credit card customers decreased by 4.67 lakh between December and April, when they stood at 14.9 million, while SBI has gained over 6 lakh new cards and ICICI gained 10 lakh, reported PTI.
Queries sent by Money9 to the HDFC Bank remained unanswered by the time of filing the story.