HDFC Bank - RBI Lifts Restriction For Sourcing Of New Credit Cards: Motilal Oswal
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Motilal Oswal Report
The Reserve Bank of India have partially lifted the restrictions placed on HDFC Bank Ltd. in December 2020 and have allowed the bank to source new credit cards.
However, the restrictions on new digital application launches will continue.
The RBI move addresses the key overhang as HDFC Bank is the largest credit card issuer in the country and credit card segment is the key to bank’s overall profitability.
During recent quarters the bank has reported moderation in fee income/net interest income, affected by RBI’s restriction on credit cards sourcing as this segment contributes ~25%-33% of the total fee income for the bank.
The bank had nearly lost ~0.6 million cards since the date of embargo.
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