The Reserve Bank of India (RBI) has lifted an eight month ban on HDFC Bank in a big relief to the private sector lender, a bank spokesperson confirmed. On December 3, in an unprecedented move the bank was barred from issuing new credit cards and launching any new digital products after multiple issues linked to digital banking, cards and payments on the bank’s platform in the last two years.
HDFC Bank, the largest issuer of credit cards in India lost market share in the last few months as restrictions on issuing new cards meant sales stopped. Outstanding credit cards dropped from 15.4 million in November 2020 to 14.9 million in May 2021.
However, in a call with the media at the end of June the bank’s senior management expressed confidence that they will make up for the lost time by cross selling to liability and other asset customers once the ban on issuing new cards is lifted.
Parag Rao, group head, payments, consumer finance, digital banking and IT at HDFC Bank said the bank is preparing to return to the market “with a bang” whenever RBI removes the ban. In the last seven months the bank has put an early warning system to manage large volumes, declogged processes and replaced old technology as part of its short and long term plan submitted to RBI, Rao said.
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