The asset quality of HDFC Bank, the country’s largest credit card issuer, remains stable even as several of its peers are facing challenges, a senior official said on Thursday.
The bank’s head of payments business and consumer finance Parag Rao told reporters here that the bank is seeing a “good trend” on Unified Payments Interface (UPI) for credit cards.
Speaking on the sidelines of the launch of the co-branded credit card, Rao said, “We have not seen any increase (in default) or any stress in our portfolio. We have remained stable even after coming out of the pandemic.” With Marriott Bonvoy.
Recently, concerns have been expressed by several players in the industry over the high growth in unsecured credit card portfolios, leading to speculation about regulatory steps to address the concerns.
State-run banks’ gross non-performing assets (GNPAs) from the credit card segment are set to double to 18 per cent at the end of 2022-23, according to RBI data.
When asked about the possibility of any such intervention by the regulator, Rao declined to comment, but admitted that there have been “discussions” on rising stress on unsecured loans.
The bank has always been prudent in its approach and has not made any changes in its underwriting norms, he added.
Strategies such as choosing who to lend to after running each case through an analytics engine and monitoring the portfolio regularly to recognize early signs of stress and tracking the environment to understand cyclical business, he added. has helped the lender.
Rao said around three-fourth of the credit cards are sold to existing customers of the bank, while the rest are sold from the market and this trend will continue.
Rao declined to share the exact number of NPAs from the credit card business, but said the number is half that of its nearest rival.
According to official data, HDFC Bank had 18.3 million cards in the market by June 2023 and remained the leader despite several weeks of hiatus in adding new customers after being penalized by the Reserve Bank of India.
Rao said the bank is adding 25-30 per cent new cards every year and expects the number to remain the same in 2023-24.
He declined to share targets on the newly launched offering, but said the bank will focus on wallet share gains as it is a premium product.
Customers need to pay an annual fee of Rs 3,000 to avail the card, which comes with a host of benefits including access to airport lounges, golf sessions and complimentary stays.
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