HDFC Bank Targets Issuing One Million Credit Cards Every Month
The recovery for HDFC Bank has been swift since the eight-month long card ban was lifted in last year, with the bank seeking to move past the punishment for repeated online glitches that hurt users
HDFC Bank Ltd, India’s largest private bank, is seeking to issue one million credit cards every month, as reported by Bloomberg. HDFC Bank made a remarkable comeback after the Reserve Bank of India (RBI) banned it from taking on new card clients two years ago.
Parag Rao, country head for payments business, consumer finance, digital banking and marketing, HDFC Bank, said that the lender wants to double the current pace of half a million new credit card issuances every month. The firm will announce partnerships across a range of industries from online retail to food delivery in the coming weeks to increase spending on cards, he said.
According to the Bloomberg report, the recovery for HDFC Bank has been swift since the eight-month long card ban was lifted in August last year, with the lender seeking to move past the punishment for repeated online glitches that hurt its customers.
RBI data showed that the bank captured 29 per cent of India’s overall spending on credit cards in October, the highest among its competitors.
“We focus not only on the issuance of cards which is a distribution game, but on deep engagement, ensuring customers find more value in their cards, and keep spending,” Rao said.
The partnerships in the next few weeks also include two airlines and a large hotel chain, according to Rao. HDFC Bank is in the final stages of developing a new digital credit card to pull in younger customers, he added.
Banks in the world’s second most populated country are poised to benefit from the growth in online shopping where customers use their credit cards for purchases. Between 200 million and 300 million Indians are expected to spend $50 billion on online retail this year, according to a Bain & Co Inc. report.
Part of the push at HDFC Bank will be tied to its merger with Housing Development Finance Corp., which will give it access to the mortgage lender’s customers, Rao said. The two firms agreed to combine this year in one of the biggest global deals to ride a boom in home loans and consumer spending in India.
Beyond partnerships, the bank also wants to attract more customers who use credit cards from India’s local retail payment system known as RuPay, according to Rao. He sees recent rules that allow the linkage of RuPay credit cards to the widely used government-backed payment interface expanding the market for these cards.
“The credit lines for such customers will be small but these will be customers of the future, who can upgrade to other cards as they evolve,” Rao said. And while peers are offering rewards on a slew of products to gain customers, HDFC Bank is avoiding this strategy.
“We never have had the best discounts in the market nor do we want to be known as the card with the most discounts,” Rao added.
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