MUMBAI : India's most valuable lender HDFC Bank has set out an ambitious plan to more than double monthly card issuance from September after the central bank lifted a temporary ban imposed on HDFC in December, according to a source.
"The sales teams have been asked to meet a target of issuing 500,000 cards a month starting September for the next few months," said the source with direct knowledge of the matter.
HDFC Bank, which in September 2020 had issued nearly 200,000 cards, did not immediately respond to a request seeking comment.
The latest target is a big jump from a year ago but some analysts said it was achievable given the number of "liability" or savings accounts it has opened this year. Savings account holders are typically sold credit cards and loans by lenders.
"Having added close to 3.65 million liability accounts from Jan 2021 to June 2021, it can easily capture market share in the credit card space," Macquarie said in a research note.
Earlier the bank said in a regulatory filing that India's central bank had relaxed restrictions placed on it last year on issuing new credit cards, following outages in the bank's digital payment services.
The relaxation was welcomed within the company.
"All the preparations and strategising that we have put in place to 'come back with a bang' (on credit cards) will now be rolled out," HDFC Bank Chief Executive Sashidhar Jagdishan said in an internal email to employees, a copy of which was seen by Reuters.
"In the coming months, we will aggressively go to the market with not just our existing suite of credit cards but also new offerings in the form of co-brands and partnership," Jagdishan said in the email.
With nearly 15 million credit cards in issue, HDFC Bank is the largest lender in the segment with nearly 24per cent market share. Yet over the last eight months peers such as ICICI Bank and SBI Cards have gained ground.
As of June, ICICI Bank had 11 million credit cards, up from about 10 million in January.
"Lifting of RBI (Reserve Bank of India) restrictions before the festive season augurs well and we expect HDFC bank to turn more aggressive on credit cards over the next few months," brokerage Motilal Oswal said.
HDFC Bank is the seventh most valuable lender in Asia-Pacific with a market capitalisation of 8.37 trillion rupees (US$112.7 billion).
(US$1 = 74.2560 Indian rupees)
(Reporting by Nupur Anand in Mumbai; Additional reporting by Chris Thomas in Bengaluru; Editing by Shounak Dasgupta and David Holmes)