HDFC Bank aims to regain cards market share in 3-4 quarters

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Updated: August 24, 2021 11:14 AM

Prior to the ban, HDFC Bank held pole position in terms of both number of cards in force as well as card spends.

Also, there is a larger 60 million-strong base available for customers who are sort of keen on taking credit cards.Also, there is a larger 60 million-strong base available for customers who are sort of keen on taking credit cards.

HDFC Bank is aiming to hit the credit card issuance run rate it had just prior to the embargo issued by the Reserve Bank of India (RBI). It plans to recover its market share in cards outstanding over the next three-four quarters, the bank said on Monday.

Parag Rao, group head – payments, consumer finance, digital banking & IT, HDFC Bank, said in November 2020, the bank had hit a run rate of incremental issuance of over 3 lakh cards per month. “So, in a quarter, we plan to hit that milestone and post that it would be half a million cards a month which we expect to happen over the next two quarters. Over the next three to four quarters, our clear aim is to regain the market share (by number of cards) which we have lost and are pretty confident with the plan we have in place,” Rao said.

According to a recent report by Motilal Oswal Financial Services, HDFC Bank has lost nearly 0.6 million cards since the date of the embargo in December 2020. On the other hand, ICICI Bank, SBI Card and Axis Bank added around 1.3 million, 0.75 million and 0.3 million new cards, respectively, over the same period. ICICI Bank and SBI Card’s incremental market share rose sharply to 49% and 28%, respectively, during the period, the report said.

Prior to the ban, HDFC Bank held pole position in terms of both number of cards in force as well as card spends.

The bank’s open market strategy before the embargo was 15-18% of its total card base. With the increase in very selective strategic alliances, the share of open market customers could go up to 22-24% in the long run, Rao said. The strategy will still be to reach out to existing bank customers. “We will always have a set of pre-approved liability customers,” he added.

Rao said during the embargo, the lender looked at a number of issues, which customers were facing and took some commercial and technical decisions to make the experience simpler. The bank focused on its existing card portfolio, connecting with them and looking at detailed patterns of their spends.

Over the last eight months, HDFC Bank had been sourcing in excess of 4 lakh accounts every month and it sees that base as available for immediate sourcing. Also, there is a larger 60 million-strong base available for customers who are sort of keen on taking credit cards.

“So even within the bank’s internal base, we have a significant headroom to grow and that’s the reason I said our strategy will continue to be largely focusing on internal customers, customers who have a liability relation with the bank,” Rao said.

For the time being, all new credit cards issued by HDFC Bank will be on the Visa and RuPay platforms as MasterCard and Diners International are currently barred from issuing new cards.

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