ICICI plays its card right amid HDFC ban & how!

Mumbai: With a prolonged business embargo on HDFC Bank, ICICI Bank is ramping up its digital infrastructure to gain market share in the cards business.Reserve Bank of India data for April showed that HDFC Bank lost nearly 160 basis points of market share since the end of November 2020, when the regulator levied a business embargo on it.During the same period, ICICI Bank, SBI Cards and Axis Bank have gained 108 basis points, 37 basis points and 11 basis points, respectively, in market share, data compiled by brokerage house Macquarie showed.In overall card spends, while ICICI Bank gained 360 basis points market share, HDFC Bank lost nearly 220 basis points during the December to April period. 83766617“ICICI Bank has been the biggest beneficiary from a ban on the issuance of new credit cards by HDFC Bank,” said Suresh Ganapathy, associate director, Macquarie Capital. “The bank has tied up with neobanks and fintech players and done a good job on the tech front. So, if the ban on HDFC Bank credit card issuances continues and heads well into the festive season, then ICICI Bank is going to capture market share in a big way and capitalise on this window of opportunity.”Ganapathy added that ICICI Bank’s co-branded card with Amazon has helped it to scale up its credit card business in a significant way.In terms of the number of cards, HDFC Bank has a share of 24%, followed by SBI Cards at 19.2%, ICICI Bank at 17.2% and Axis Bank at 11.6%. RBI data showed a significant slowdown in credit card additions at the industry level.HDFC Bank, meanwhile, is rapidly upgrading its IT infrastructure in anticipation that the RBI could lift the business sanctions. HDFC Bank, which issues nearly 150,000 credit cards a month, was directed by the RBI in December to stop issuing fresh cards until it had sorted out its tech problems.The bank also couldn’t launch any new digital initiatives. In February, the regulator appointed an external firm for carrying out a special audit of HDFC Bank’s IT infrastructure. The report was submitted last month.

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