RBI ban on new credit cards sale hit market share; will come back with a bang once embargo lifted: HDFC Bank

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26 Aug, 2025 12:21

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The RBI's ban on selling new credit cards has impacted market share on an incremental basis, HDFC Bank said on Wednesday, promising to get back to the market "with a bang" once the "temporal" embargo is lifted and recoup the losses.

The bank's head of consumer finance, digital banking and information technology, Parag Rao, said that it has used the last six months to "introspect, re-engineer and innovate" about the cards business, where it has 15.5 million customers.

The bank has lost its market share by a couple of percentage points because of the ban, but the actions taken internally have ensured that it continues to hold on to market share by spends, he said.

In December, the RBI acted against repeated technological outages at HDFC Bank over two years by slapping unprecedented penalties, which included a ban on any new credit card issuance and also prohibition on launching new digital initiatives.

"We have got very aggressive plans to get back in the market with a big bang... You will rapidly see HDFC Bank not just regaining market share but also significantly increasing our spend market share," Rao said.

Without sharing any details over when he expects the ban to be lifted, Rao said within 3-4 months of the ban getting lifted, one should expect a correction in the incremental market share back to the pre-ban levels, launch of new products and features and also partnerships which have been forged during this period.

"We were very clear that this is at best a temporal situation. During the six months when we were not issuing new credit cards, we increased our merchant acceptance base, our liability franchise increased and today we are sitting on a large base of already analytically data mined customers who have already kept ready and pre-approved," he said.

The "large sales force" has been trained, re-skilled and primed for the aggressive play ahead and backend processes for them have also been made more streamlined, Rao said.

He admitted that rivals have seized up on the opportunity once HDFC Bank stopped issuing the cards, amidst reports on how ICICI Bank and SBI, among others have grown. It can be noted that HDFC Bank's credit card customers decreased by 4.67 lakh between December and April, when they stood at 14.9 million, while SBI has gained over 6 lakh new cards and ICICI gained 10 lakh.

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, adding that it has now presented a plan which focuses on the immediate, short term, mid-term and long term plan to the central bank.

"We are awaiting the comments from the RBI. We are hopeful that RBI will be satisfied with the plan which we had submitted," he said.

Rao said the bank's investments in technology were already at par with global standards, but the recent regulatory action will see higher spends on technology over the next two or three years.

Reiterating its focus outlined earlier, he said outages do happen and they happen with rivals as well, but the important aspect will be how it manages its way out of a crisis.

The bank's shares were trading 0.17 per cent down at Rs 1,499 apiece on the BSE at 1344 hrs, as against gains of 0.28 per cent on the benchmark.