Tag: hdfc bank market share

HDFC Bank will issue 3 lakh cards a month, regain lost ground, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: HDFC Bank on Monday unveiled its plans to regain the market share it lost in credit cards during an eight-month ban on new issues.

The bank said that it will issue three lakh cards a month — its monthly run rate before the ban — for the next two to three quarters, following which it will scale up to five lakh cards a month.

Outlining the plans, the bank’s group head for payments & consumer finance, digital banking and IT, Parag Rao, said, “In the next three to four quarters, we will regain all our lost market share. The bank has lost close to 2% as rivals like ICICI Bank, Axis Bank and SBI Card swooped in to fill the demand.”

According to Rao, the four-pronged strategy would be to tweak the products, sell more cards to its six-crore customer base, add more partners like fintech companies, telecom, hospitality and pharma companies. It has also revamped the digital process to allow more do-it-yourself features to customers on the bank’s app.

Rao said that despite the embargo from the RBI, the bank managed to scale up spend volumes by 60% year-on-year during the first quarter.

“Our card spend is on an average one and a half times that of the industry,” said Rao. He said in the eight months the bank has been busy analysing industry trends and customer behaviour and now planned to put them to work.

“During the pandemic, we have seen cards being used for low-value transactions as well. In the past, lower credit limits resulted in inactive cards. We are now seeing active users voluntarily opting for lower limits,” Rao added.

HDFC Bank’s outstanding credit cards has declined to 1.48 crore as of June 2021 from 1.53 crore in November 2020 as a result of the ban. The same for ICICI Bank increased to 1.10 crore from 97 lakh, and SBI Card had its number increase to 1.20 crore in June 2021 from 1.12 crore in November 2020.

In a statement, the bank said that it has 20 new partnerships lined up for the next 6-9 months, including co-branded offerings. Rao said while the bank lost market share in terms of number of active cards, it has been able to retain its share by overall spending courtesy specific initiatives to prod customers.



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HDFC Bank hopes to return with a ‘bang’ and regain lost market share

Personal Finance

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Laying out future plans, once the embargo is lifted, he said the bank had a much more wholesome strategy.

HDFC Bank expects to regain the lost market share and make a strong comeback once the regulator lifts the embargo on issuing new credit cards, Parag Rao- head of consumer finance, digital banking and information technology said on Wednesday.

Without sharing details over when he expected the ban to be lifted, Rao said within three-four months of the ban getting lifted, one should expect incremental market share back to the pre-ban levels. The bank has been in constant discussion with RBI ever since the ban was imposed, and has upgraded its systems as per the indications from the regulator, Rao said. He added that it had now presented a plan that focuses on the immediate, short-term, mid-term and long-term to the central bank.

According to the RBI data, in the period between December 2020 and April 2021, HDFC Bank’s credit card base contracted by 3.89 lakh. While ICICI Bank’s credit card portfolio increased by 8.15 lakh, SBI Card and Axis Bank added 4.37 lakh and 3.29 lakh cards, respectively. However, HDFC Bank continues to have the largest customer base in the segment with 1.49 crore outstanding credit cards as on April 30, 2021.

In December, RBI a had stopped HDFC Bank from issuing fresh credit cards and announcing new digital initiatives following multiple outages the bank witnessed over the past few years. The regulator also called for a third-party audit of the bank’s IT infrastructure.

“We have used the last six month period since December to introspect, reinvigorate and re-engineer for the future. We will use tech and digital to help us continue being dominant in the space and will get back to the market with a bang. We have the entire system ready and charged up,” said Parag Rao, group head – payments, consumer finance, digital banking and IT, HDFC Bank.

Laying out future plans, once the embargo is lifted, he said the bank had a much more wholesome strategy. “It is not only to regain our (credit cards) number and value market share but also to forge new partnerships, build more scale, introduce newer products and services and continue on our journey of being the dominant payments bank player in the space,” he said.

Rao said the bank had been using the six-month period to work on its technology and digital processes and also had a base of pre-approved customers, who will be offered credit cards when the embargo is lifted.

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