- On August 17, the banking regulator partially lifted its technological ban on HDFC Bank.
- The central bank has authorized HDFC Bank to procure new credit cards in accordance with a letter sent to the bank on August 17.
- However, the restriction on all new bank launches planned as part of Digital 2.0 will continue.
New Delhi: HDFC Bank shares climbed to 3.3% on Wednesday (Aug. 18) after the Reserve Bank of India authorized the private sector lender to issue new credit cards. On the NSE, HDFC Bank shares hit an intraday high of Rs 1,565.35 from its previous closing price of Rs 1,514.65.
On August 17, the banking regulator partially lifted its technological ban on HDFC Bank. The central bank has authorized HDFC Bank to procure new credit cards in accordance with a letter sent to the bank on August 17.
“RBI voids that its letter dated August 17, 2021 relaxed the restriction on the provision of new credit cards. The Bank’s Board of Directors has taken note of said letter from RBI,” HDFC Bank said in a statement. press release sent to the stock exchanges.
However, the restriction on all new bank launches planned as part of Digital 2.0 will continue. “The restrictions on all new launches of digital business generating activities planned as part of Digital 2.0 will continue until further review by RBI. We will continue to engage with RBI and ensure that all parameters are met.” the lender said in the statement.
Sources said And now that HDFC Bank is formulating a strategy to relaunch credit card issuance shortly.
In December last year, the RBI banned the largest private-sector lender from selling new credit cards and launching new digital services, due to a series of network outages.
As a result, HDFC Bank set up a “digital factory” and a “corporate factory” at the end of June to roll out new digital products and services in the future and increase its IT infrastructure.
On July 17, HDFC Bank CEO Sashidhar Jagdishan said the RBI’s ban on new digital launches for technology concerns had an impact on the company. He added that HDFC is ready to bounce back and launch new products once the ban is lifted, but it will take around 12 to 15 months to complete the technological transformation.
It should be mentioned here that in the absence of HDFC Bank, competitors had gained market share in the domestic credit card business. But with the partial lifting of the ban by RBI, analysts believe HDFC Bank will regain lost ground and cross-sell more aggressively in the credit card industry, where it remains the domestic market leader.
“Besides the positive impact on business, this is a big moral boost within the bank which may have been affected due to the ban,” he added. Economic times quoted as saying Asutosh Mishra, head of research at Ashika Securities. “This allows the bank to cross-sell to its large retail customers and take advantage of the various partnerships it has entered into on consumer products. “
At 10:42 am, HDFC Bank shares were trading 1.76% higher at Rs 1,541.30 each, outperforming the sector benchmark Nifty Bank, which was up 0.45%.