The RBI’s ban on the sale of new credit cards has affected market share; will come back in force once the embargo is lifted: HDFC Bank

MUMBAI: RBI’s ban on selling new credit cards has had a gradual impact on market share, HDFC Bank said on Wednesday, vowing to return to the market “in force” once the embargo “lasts” lifted and recover losses.
The bank’s head of consumer credit, digital banking and IT, Parag Rao, said he used the past six months to “introspect, reorganize and innovate” on the card industry , where it has 15.5 million customers.
The bank lost its market share by a few percentage points because of the ban, but actions taken internally allowed it to continue to retain market share by spending, he said.
In December, the RBI took action against repeated two-year HDFC Bank technology blackouts by imposing unprecedented sanctions, including a ban on all new credit card issuance and a ban on launching new digital initiatives.
“We have very aggressive plans to come back to the market with a big bang… You will quickly see HDFC Bank not only regaining market share, but also dramatically increasing our spend market share,” said Rao.
Without sharing any details on when he expects the ban to be lifted, Rao said that within 3-4 months of the ban being lifted, a correction to the ban is to be expected. additional market share to return to pre-ban levels, the launch of new products and features, and the partnerships that were formed during this period.
“We have been very clear that this is a time-bound situation at best. During the six months that we were not issuing new credit cards, we increased our merchant acceptance base, our accountability has increased and today we are sitting on a large already analytical database of data mining clients who are already ready and pre-approved, ”he said.
The “great sales force” has been trained, re-qualified and prepped for aggressive upstream play and the backend processes for them have also been streamlined, Rao said.
He admitted that his rivals seized the opportunity after HDFC Bank stopped issuing the cards, amid reports of growth from ICICI Bank and SBI, among others. It can be noted that HDFC Bank credit card customers decreased by 4.67 lakh between December and April, when they amounted to 14.9 million, while SBI gained more than 6 lakh of new cards and ICICI won 10 lakh.
The bank has been in constant discussion with RBI since the ban was imposed and has upgraded its systems as directed by the regulator, Rao said, adding that it has now presented a plan that focuses on the immediate, the short term, the medium term. long-term and long-term plan at the central bank.
“We are awaiting the comments from the RBI. We hope that the RBI will be satisfied with the plan that we have submitted,” he said.
Rao said the bank’s investments in technology were already at global standards, but the recent regulatory move will lead to increased spending on technology over the next two or three years.
Reiterating his goal described earlier, he said blackouts do happen and they also happen with rivals, but the important aspect will be how he handles his way out of the crisis.
The bank’s shares were trading down 0.17% at Rs 1,499 each on the BSE at 1344 hours, against gains of 0.28% on the benchmark.

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