SBI Cards jumps 5% after rival HDFC Bank asked to pause sourcing new credit card customers

MUMBAI: SBI Cards & Payments Services jumped nearly 5 per cent on Thursday after the Reserve Bank of India (RBI) asked top private lender HDFC Bank to temporarily stop launch of new digital business activities and not to add new credit card customers following repeated outages in its electronic banking services.

The central bank has also asked the bank’s board to examine the lapses and fix accountability.

At 2 pm, SBI Cards & Payment Services was up 4.78 per cent at Rs 835, while HDFC Bank dropped 1.74 per cent to Rs 1,382.45. In comparison, Sensex was up 0.08 per cent at 44,655.48 points.

While HDFC Bank is the largest credit card issuer in India, SBI Cards is the second-largest pure-play credit-card issuer in the country. The company’s separate identity from the parent SBI helps SBIC focus solely on the credit card business and offer customized products.
“The RBI has advised to stop all launches of the Digital Business generating activities planned under its program - Digital 2.0 (to be launched) and other proposed business generating IT applications and (sourcing of new credit card customers,” HDFC bank said in an exchange filing.

“The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI,” it added.