Ban lifted on digital launches of HDFC Bank

HDFC Bank on Saturday said the Reserve Bank of India (RBI) has lifted its embargo on new digital launches by the lender. In August 2021, the regulator had revoked a ban on fresh issuance of credit cards by HDFC Bank. The two measures were regulatory penalties imposed in December 2020 for repeated instances of outages on the bank’s digital channels.

“We would like to inform one and all that the Reserve Bank of India has lifted the restriction on the business generating activities planned under the Bank’s Digital 2.0 programme, vide its letter dated March 11, 2022,” HDFC Bank said on Saturday.

FE had reported earlier this week that HDFC Bank is working on a plan to build a challenger digital bank in order to prepare for a future where licences for digital banks are issued. The challenger will be a purely digital bank focused on targeting a younger set of customers over their lives and careers.

While HDFC Bank remains the market leader in terms of credit card spends, its nine-month-long absence from the market has hurt its competitive position. For instance, the bank’s cards in force (CIF) grew just 5% year-on-year (y-o-y) in January 2022, even as rivals ICICI Bank and SBI Card grew their outstanding card portfolio by 24% and 14%, respectively, during the month.

In January 2022, HDFC Bank’s share in cards outstanding was 22.8%, down from 25% in January 2021. Its market share in spends fell to 24.8% from 31% a year ago.

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