InvestorQ : How has HDFC Bank fared on credit cards after the ban was lifted last year?
Moii Chavate made post

How has HDFC Bank fared on credit cards after the ban was lifted last year?

Tisha Malhotra answered.
1 month ago

The ban on issue of fresh credit cards was lifted by the RBI on HDFC Bank in August 2021. It is a full one year since the ban was lifted. In the one year since the ban was lifted, the bank has successfully managed to recoup market share. Of course, it is still short of its pre-ban levels of market share, but it is better than just after the ban. In July 2022, HDFC Bank saw its market share expand to 28.4%, which is an increase of 190 basis points from the post-embargo market share. However, it is still below its peak market share of 30.67%.

Ironically, the dominance of HDFC Bank in the credit card business was so strong that it remained the largest credit card issuer in India even after losing market share during the embargo. But there has been a catch in its growth. While HDFC Bank saw its overall market share improve, the cards-in-force market share has fallen in the post embargo period. Cards in force represents the total number of cards including primary cards and supplementary cards. Other issuers have been adept at deepening the relationship with multiple cards.

Even as the market share in card spend has increased for HDFC bank post the embargo, its share of cards in force has actually fallen post the embargo. For example, the market share of HDFC Bank in cards in force was 25.59% prior to the ban imposed by the RBI. The ban resulted in a sharp fall in customer base and the cards in force market share also dropped to 23.1% by the time the embargo was lifted. Now, a full year after the embargo was lifted, the market share of cards in force has fallen further to 22.4%.

Obviously, there were other gainers from this ban. In terms of numbers, ICICI Bank emerged the biggest gainer, adding 4 million credit cards since December 2020, when the ban on HDFC Bank was imposed by the RBI. During the period, SBI added 3.24 million cards and Axis Bank added 3.05 million cards. Since August 2021, when the ban was lifted, HDFC Bank added 3.21 million cards followed by Axis Bank adding 2.62 million cards. At third and fourth place were ICICI Bank adding 2.27 million cards and SBI Cards adding 2.13 million cards.