By Aditya Raghunath
Investing.com -- Multiple media reports over the last few months have spoken about how HDFC Bank Ltd (NS: HDBK ), India’s largest private-sector bank, has been losing market share to peers like ICICI Bank Ltd (NS: ICBK ) and SBI (NS: SBI ) Cards and Payment Services Ltd (NS: SBIC ). It has been in the news because of its tech troubles and a ban from the Reserve Bank of India against any new issuance of credit cards.
Today, the ban was partially lifted. While HDFC Bank can start issuing credit cards again, there are restrictions on the bank’s digital businesses. However, the bank’s shares have rebounded smartly in August.
After falling to a low of R 1,418.25 on July 29, its shares are currently trading at Rs 1,530 as of this report, up 7.87%.
"Lifting of RBI restrictions before the festive season augurs well and we expect the bank to turn more aggressive on credit cards over the next few months," Macquarie said in a research note.
With 15 million credit cards, HDFC Bank is the largest player in India with a 24% market share. "The RBI move addresses the key overhang as HDFC Bank is the largest credit card issuer in the country and the credit card segment is the key to the bank's overall profitability," said Motilal Oswal (NS: MOFS ).
In a media statement, HDFC Bank said, "As stated earlier, all the preparations and strategies that we have put in place to 'come back with a bang' on credit cards will be rolled out in the coming time."
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