HDFC Bank Will Issue 3 Lakh Credit Cards Every Month! Credit Revolution Unleashed?
Over 8 months after the banking regulator, Reserve Bank of India (RBI) prohibited the country’s largest private lender, HDFC Bank from issuing fresh credit cards and any new digital launches, the latter has announced to win back the market share by the number of cards, in the next three months.
The RBI had last week granted the private bank the authority to re-issue credit cards, after banning it from doing so in December 2020, due to multiple glitches reported on HDFC’s mobile banking service reported by customers, over the past two years.
Speaking with reporters, a bank spokesperson stated that HDFC has (rigorous) plans of achieving monthly sales of new credit cards in the volume of 3 lakh over a period of next three months, post which it will escalate this number to 5 lakh a month in the next two quarters.
HDFC to Regain Market Share
Days after being allowed to issue credit cards again, HDFC has entered the card market with ambitious plans.
Parag Rao, Head for Payments and Consumer Finance, Digital Banking and IT, informed about the private lender’s plans of regaining its market share in terms of the number of cards.
It aims to achieve its pre-ban (December 2020) number/volume of credit card sales in the next three months and take over its position as the highest number of credit card issuer over the next one year.
According to PTI, HDFC will accomplish card sales to the volume of 3 lakh/month over the next three months, followed by 5 lakhs a month in the following two quarters after that.
“The bank expects this to happen over the next two quarters. Over the next three to four quarters, our clear aim is to regain the lost market share,” stated Rao.
AT present, HDFC plans to focus only on issuing cards to its bank customers, while the share of non-bank card customers will remain below 25%.
Rao also informed that credit card spends for the April-June quarter is 60% higher, as depicted by the card portfolio.
The bank is also working towards partnering with various segments, like food delivery, education, content, video content, consumer durable, office at home, and more.
“We may not be able to talk about many of the partnerships, alliances, and relaunches in detail because a lot of them are work in progress, but you’ll see them deployed over the next three to six to nine months,” added Rao.
After the announcement of HDFC’s ambitious roadmap yesterday, its share price ticked up by 0.60% to Rs 1523.50 on BSE on Monday.
HDFC Replaced by ICICI Bank
Due to the RBI ban of HDFC last December, the bank lost about 3.23 lakh credit card users in the last quarter of FY21, pulling down it’s credit cards customer base in the quarter ending March 2021.
Its card base tumbled from 15.38 million in December, 2020 to 14.82 million in June, 2021.
Notably, ICICI Bank added a record number of 672,911 new credit card users between the Dec 2020 and Mar 2021 period.
It gained over 11.6 lakh customers between Dec 2020 to May 2021. The total number of new credit cards issued in March alone was 4.02 lakh.
In Q4 FY21, following ICICI Bank as the highest number of new credit card user additions, was SBI Cards.