RBI allows HDFC Bank to issue Cards
A full 8 months after the RBI had imposed a ban on fresh card issuances by HDFC Bank and launch of any fresh digital initiatives, the RBI has lifted the ban on the issue of fresh cards. HDFC Bank can now go ahead and issue new credit cards to its customers. However, the RBI restriction on launching new digital initiatives will continue for the time being. The RBI has not specified any time frame.
It may be recollected that the RBI had imposed a ban on HDFC Bank in December 2020, barring it from issuing fresh credit cards or launching new digital initiatives. This was after HDFC Bank online platform and its mobile app had suffered a series of outages, causing massive inconvenience to its vast mass of retail and wholesale customers. This was after customers of HDFC Bank had complained of such outages for close to 2 years.
Read: HDFC Bank Q1 Results
The RBI, based on the IT audit of HDFC Bank’s systems, had identified a list of action points to be taken by the bank on a continuous basis to keep its systems robust. The CEO of HDFC Bank, Shashidhar Jagdishan, has confirmed that the bank had already completed 85% of the actionable points outlined by the RBI and it was monitoring on an ongoing basis.
HDFC Bank currently has over 15.5 million credit card customers and was the largest issuer of credit cards prior to the ban. HDFC Bank top management has confirmed that the 8-month ban had resulted in its market share in card issuances falling nearly 200 bps. However, the bank has held on to its market share in terms of overall spending.
The revocation of the ban will be a sentimental positive. HDFC Bank currently has a market cap of Rs.8.50 trillion and a free-float market cap of Rs.6.70 trillion.
Start Investing Now!
Open Free Demat Account in 5 mins