HDFC Bank tops in credit card spending despite RBI ban on issuing fresh cards

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Spending through credit cards rose 54% in August to Rs 77,733 crore year-on-year. The same stood at Rs 50,319 in August 2020. Over the same period, the number of credit cards also rose by nearly 10% from 5.8 crore to 6.4 crore. Private sector lender ICICI Bank replaced SBI Cards as the number two in credit card spending, according to the latest data shared by the Reserve Bank of India (RBI). According to RBI’s data, ICICI Bank’s market share, which was 15.8% in August last year, climbed to 19.6% in the same month this year. SBI’s Card’s market share slipped to 18.7% in August 2021 from 20% in the corresponding month last year, the Times of India has reported.

HDFC Bank remains the market leader

HDFC Bank remains at top of the list with a market share of 26.5% of the total credit card spending in the country. Its market share, however, dropped from 28.7%. The slippage can be attributed to the eight-month-long ban that RBI had placed on HDFC Bank on issuing fresh credit cards. The ban was lifted only last month. Since then, the bank has reportedly added four lakh more credit cards to its base of 1.47 crore users.

The news reports, quoting experts, said that since November last year HDFC Bank and SBI Cards have lost around 285 basis points and 90 basis points, respectively, while ICICI Bank has gained 510 basis points in the market share. The total amount spent by ICICI’s credit cards for July 2021 was equal to the amount spent through SBI’s cards despite the former’s market share being lower than SBI’s.

Suresh Ganapathy, an analyst with Macquarie Research, is quoted by The Times of India as saying that ICICI’s co-branding with Amazon, estimated to be around 16 lakh, constituting around half of the incremental card additions, helped the bank in scaling up its credit card business in a major way.

Promotions for festive season

HDFC Bank has meanwhile launched a campaign, ‘Festive Treats 3.0’, to provide offers, loans and EMIs on cards. According to an HDFC official, quoted in the news report, the bank has partnered with over 10,000 merchants across 100 locations in India, in anticipation of customers returning to offline shopping, given the lowering of Covid-19 cases in the wake of increasing vaccination.

Parag Rao, the group head (payments, consumer finance, digital banking and IT), HDFC Bank, was quoted as saying that the bank had partnered with more hyperlocal merchants to offer more offers for their offline customers. Rao added that HDFC would be disseminating information about its offers through its ATMs.