This decision comes after an internal review focused on the cost-to-income ratio, according to Parag Rao, the group head overseeing Payments, Consumer Finance, Marketing, and the Liability Product Group at HDFC Bank. Rao mentioned, "We took a pause because we reviewed the entire nature of the partnership. We monitor cost to income and sometimes the cost-to-income measure does not work out for a particular partnership."
The partnership, which involved offering instant cashbacks and EMI facilities for Apple products through HDFC Bank credit cards, is being reassessed. With HDFC Bank stepping back, Apple has shifted to partner with other financial institutions in India. According to Apple’s website, instant cashback and no-cost EMI options are now available through American Express, Axis Bank, and ICICI Bank. Rao pointed out, “They have taken on some other bank partners, and I think you can judge the quality of the relationship, which we had with Apple from the fact that for five years, we were the only bank, and now they have taken on two.”
Despite this shift, HDFC Bank is preparing for increased business during the upcoming festive season, expecting a boost in incremental deposits, asset disbursals, and card spending. Rao stated, “We are preparing for the typical spike which happens. But we do believe that we will be able to get a good share of incremental deposits on the liabilities side, disbursals on the asset side, and of course spend on the cards side.”
HDFC Bank remains committed to a prudent business strategy, especially amid growing regulatory scrutiny on retail unsecured loans. Rao emphasized, “We have always been prudent in our underwriting policy. You will never see us suddenly opening up our policy gates. We are market leaders. We don’t need to just get any business. We are very clear about that.”
The bank is also experiencing positive results from its revamped PayZapp app, which now has close to 14 million users, with 60% being HDFC Bank customers. Additionally, HDFC Bank continues to maintain a significant presence in the UPI ecosystem, holding a 14% market share. Rao highlighted the bank’s commitment to enhancing its contribution to UPI transactions and its strategy to grow its retail deposit base by using digital tools and expanding its branch network.
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HDFC Bank’s pause in its partnership with Apple marks a strategic reassessment |
While HDFC Bank’s pause in its partnership with Apple marks a strategic reassessment, the bank is focused on growth through careful financial management, digital innovation, and strong customer relationships. As the festive season approaches, HDFC Bank is poised to leverage the expected surge in business, reinforcing its standing as a leading player in India’s banking sector.