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Mumbai, Nov. 9 Notwithstanding the high delinquencies reported by bank and non-bank entities in the credit cards business in the recent past, HDFC Bank has decided to spend big bucks to upgrade its credit card related infrastructure by migrating to a mainframe platform. This is to ensure that its customers can benefit from enhanced products/ service offerings, enjoy faster turnaround time and better service delivery.

The private sector bank is seen spending upwards of Rs 100 crore to set up the scalable mainframe platform, which is expected to be up and running in the six to nine months.

At present, the bank has 45 lakh credit card customers and the average spend per active card is around Rs 9,500. In terms of size, credit cards portfolio is a tenth of the bank’s total retail portfolio of Rs 60,000 crore.

“Unlike other card issuers, we did not ride the (boom) cycle. Around 70 per cent of our credit card holders have liability relationship with us. We wanted to bring an advanced technology-based product/ service offering for our customers. Hence, we are setting up a mainframe platform. As for expenditure, it will be in three digit crores,” said Mr Pralay Mondal, Country Head (Retail Assets & Credit Cards), HDFC Bank.

While delinquencies at the industry level in the credit cards business is anywhere between 30-40 per cent, Mr Mondal claimed that in his bank’s case it was half the industry average.

The bank, which on an average sees 70,000 credit card issuances a month, expects to touch peak issuance of one lakh credit cards a month in the next few months, he said.

Appetite for retail loans, which had been tepid since the beginning of the current financial year, picked up substantially in October with the bank disbursing Rs 3,000 crore. In this financial year so far, retail assets grew 5-9 per cent month-on-month.

More than half of the total amount disbursed in October was in the auto loans segment, which accounts for 40 per cent of the retail portfolio. The bank is expecting to grow its auto loan portfolio by 20 per cent over the last year.

In October, the bank’s personal loans portfolio expanded by about Rs 500 crore and home loans by around Rs 550 crore.

More Stories on : Credit Cards & Debit Cards | Private Banks | HDFC Bank Ltd

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