HDFC Bank issues 400,000 cards after lifting of curbs

Hopes to regain lost ground in 3-4 quarters

HDFC Bank has issued 400,000 credit cards since the embargo imposed by the RBI was lifted in mid-august. It has thus surpassed the milestone it had set to initially get back to its pre-embargo run rate of issuing 300,000 cards per month. The record issuance is as of September 21, 2021.

HDFC Bank has issued 400,000 credit cards since the embargo imposed by the Reserve Bank of India (RBI) was lifted in midaugust. It has thus surpassed the milestone it had set to initially get back to its pre-embargo run rate of issuing 300,000 cards per month.

The record issuance is as of September 21, 2021, the bank said. The bank had previously said its target is to issue 500,000 credit cards every month, beginning February 2022. And, consequently, it plans to regain its lost market share in outstanding credit cards in the next 3-4 quarters.

Before embargo, HDFC Bank had a market share of 25.6 per cent in the outstanding credit card market, which dropped to 23.2 per cent in July. As of July, HDFC Bank had 14.76 million credit cards in the market compared to 15.38 million cards pre-embargo.

“Over the last nine months of the embargo, we did lose market share in numbers because we had stopped sourcing. One of the ideas to get back the market share was to significantly ramp up acquisition, post the lifting of embargo, to make up for lost time. So, over the next 3-4 quarters, we will gain back the market share number and increase our value market share,” said Parag Rao, group head — payments, consumer finance, digital banking & IT, HDFC Bank.

“As a leader in the cards space, we promised we’d be back with a bang. We are now pushing the pedal not only to acquire new customers but also to enhance offerings of our existing cards,” he added.

Rao emphasised that there will be no dilution of credit norms from the bank’s side. “HDFC Bank will always be a very prudent lender and continue to be very conservative in our credit standards and I do not expect a change in our credit stance,” he said.

The bank continues to source a significant number of liability customers, which will form the base for cross-selling of credit cards. Almost 80 per cent of the new acquisition will be from the bank’s own liability customers and the rest will be open market customer acquisition. The bank already has a 60 million liability base available with itself, which it can tap into. After the RBI lifted the embargo, the lender has been focusing on key strategies — updating existing products and launching new ones for segments where it is not present currently. It also plans strategic alliances, growing the market, and creating a superior customer experience.

Compared to other electronic payment forms, the credit card market is highly underpenetrated. Hence, there is plenty of headroom to grow. And, the market has seen the entry of several new players in the past few months.

Rao said there is a whole new set of customers coming in. They are all electronically savvy. And hence, there are very important target segments for credit cards.