ICICI Bank issued 1.5 mn credit cards during Dec ’20-Aug ’21

IN AUGUST, ICICI ADDED 219,084 CUSTOMERS, FOLLOWED BY SBI CARD (162,587) AND AXIS BANK (82,619)

MUMBAI: ICICI Bank Ltd seems to have made the most of the nine-month period when private sector peer HDFC Bank Ltd was barred from issuing new cards by the banking regulator. ICICI Bank issued 1.5 million new credit cards between December 2020 and August 2021, the most by any lender, according to Reserve Bank of India (RBI) data.

In August, ICICI added 219,084 credit card customers, followed by SBI Card with 162,587 and Axis Bank at 82,619.

In December, RBI barred HDFC Bank from issuing new cards till the glitches on its e-banking portal were fixed. India’s largest credit card issuer

HDFC Bank has issued more than 400,000 new cards since the embargo was lifted on August 17, it said recently.

“Quite obviously, over the last nine months of the embargo, we lost market share in the number of credit cards as we stopped sourcing. Over the next three to four quarters we will gain back our market share,” Parag Rao, group head, payments, consumer finance, digital banking and information technology, HDFC Bank said on September 29.

Credit card is a risky portfolio for banks because of the unsecured nature of the product, but it fetches a higher rate of return. Credit card customers can broadly be classified in two groups based on repayment schedules: transactors (those who pay the outstanding amount by the due date) and revolvers (customers who pay a part of the dues to avoid default). Credit card companies earn more interest from the second category of customers.

The credit card market is buzzing with activity in the run up to the festive season, with banks rolling out new offers targeted at millennials.