The Reserve Bank of India has licensed HDFC Bank Ltd. to issue new credit cards, partially lifting a multi-month restriction on the lender.
HDFC Bank said it was fully prepared for the resumption of credit card deployment services. The bank said, in accordance with a regulatory filing, “… we wish to inform you that the RBI, in its letter dated August 17, 2021, has relaxed the restriction on the provision of new credit cards. The bank’s board of directors took note of the said RBI letter ”.
The RBI banned the nation’s most valuable lender about eight months ago over ongoing internet problems that affected its 50 million customers. However, the central bank has not lifted the ban on HDFC Bank offering new digital products.
To strengthen its online infrastructure and manage a larger volume of transactions, the bank is setting up digital and corporate units.
As a result of the restriction, HDFC Bank lost almost 1% of its market share in business, although it still accounts for around a quarter of all credit card transactions. Meanwhile, SBI Card, ICICI Bank and Axis Bank have made progress.
HDFC issued 1.5 crore credit cards to its five crore customers. While the credit deficit will persist due to the bank’s credit policy, senior executive Parag Rao says there has been a significant increase in customer base, resulting in pent-up demand.