According to a source, India’s most valuable lender, HDFC Bank, has put out an ambitious plan to more than double the monthly card issue beginning in September, after the central bank lifted a temporary ban placed on HDFC in December.
According to a source, the sales teams of HDFC bank have been asked to fulfill a target of issuing 500,000 cards every month beginning in September over the following few months.
HDFC Bank had issued roughly 200,000 cards in September 2020, The latest objective is a significant increase from a year earlier, but some analysts believe it is doable considering the number of “liability” or savings accounts launched this year. Lenders usually sell credit cards and loans to savings account holders.
“With about 3.65 million liability accounts added from January 2021 to June 2021, it can easily take market share in the credit card space,” Macquarie stated in a research report.
Previously, the bank stated in a regulatory filing that India’s central bank had removed limitations on issuing new credit cards imposed on it last year as a result of failures in the bank’s digital payment services.
Within the organization, relaxation was welcomed.
“All of the preparations and strategizing that we have put in place to ‘come back with a bang’ (on credit cards) will now be rolled out,” HDFC Bank Chief Executive Sashidhar Jagdishan said in an internal email to workers obtained by Reuters.
Jagdishan also added that in the coming months, they will aggressively go to the market with not just their existing suite of credit cards but also new offerings in the form of co-brands and partnerships.
With approximately 15 million credit cards in circulation, HDFC Bank is the largest lender in the segment, accounting for nearly 24 percent of the market. However, companies like ICICI Bank and SBI Cards have gained ground in the recent eight months.
ICICI Bank has 11 million credit cards as of June, up from around 10 million in January.
Brokerage Motilal Oswal said that the relaxation of RBI (Reserve Bank of India) limitations ahead of the festive season bodes well, and we expect HDFC bank to become more active on credit cards in the coming months.
With a market value of 8.37 trillion rupees ($112.7 billion), HDFC Bank is the eighth-most valuable institution in Asia-Pacific.
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