HDFC Bank recoups card market share after RBI lifts ban

It is exactly one year since the RBI ban on issue of fresh credit cards by HDFC Bank had been lifted. Looking back, the bank has surely tried to make amends and has recouped market share in this period. If not fully, HDFC Bank has been instrumental in partially recouping market share in credit card spends that it lost during the 8-month ban period. As per the latest RBI data published on the website, HDFC Bank has seen its market share expand by 28.4% in July 2022. That is an increase of 190 bps from the post-embargo market share.

The irony of the ban was that HDFC Bank remained the largest credit card issuer in India even after losing market share during the embargo. In the one year since the ban has bene lifted, HDFC Bank has gradually worked towards recouping its market share in the credit cards business. The latest RBI data does reveal that HDFC Bank has 28.4% market share in spends in July 2022, up 190 bps since August 2021. However, pre-embargo, HDFC Bank had a credit card market share of 30.67%, so there is still a good room for HDFC Bank to cover.

While HDFC Bank saw its overall market share improve, its market share of cards-in-force has fallen sharply. Cards in force represents the total number of cards including the primary cards and the supplementary cards, which means other issuers have been more adept at deepening the relationship with their customers via issue of supplementary cards. Pre-embargo, HDFC Bank’s market share of cards in force was 25.59%. This figure dropped to 23.1% by the time the embargo was lifted and has now fallen further to 22.4%.

During the HDFC Bank embargo, ICICI Bank emerged the biggest gainer, adding 4 million credit cards since December 2020 while SBI added 3.24 million cards and Axis Bank added 3.05 million cards. However, if you look at the period post August 2021, when the HDFC Bank card ban was lifted, they are back to their winning ways. In the last on year, HDFC Bank added 3.21 million cards compared to Axis Bank adding 2.62 million cards, ICICI Bank adding 2.27 million cards and SBI Cards adding 2.13 million cards. Leadership is back at HDFC Bank.