Mumbai: HDFC Bank, the country's largest private sector lender, spends 6-7 per cent of its total expenditure every year on technology-related aspects, a senior official said on Tuesday.
Parag Rao, head of payments and consumer finance at HDFC Bank, said the bank is investing in digital capabilities amid "cloudification", where functions are moved to the cloud.
The comments come amid greater regulatory scrutiny on the technology front.
“We spend around 6-7 per cent of our total spend on technology,” he told reporters at the bank's digital credit card launch here.
He said that when capital expenditure is high, initially the expenditure increases and then gradually decreases.He said about 50 percent of the expenditure is on employees, while the rest is on aspects like hardware, software and maintaining the network.
It may be noted that HDFC Bank was the first major lender on which business restrictions like issuing new credit cards and launching new online products were imposed two years ago.
It had to work on the system before the restrictions were completely lifted.
Asked about the Reserve Bank's recent move to allow customers to choose between card networks, Rao said he did not think it would have any impact on any business.
He said that at the industry level, lenders are currently discussing several other aspects with the regulator as it feels there are certain aspects on which some clarity can be provided.When asked whether the card switching rule was brought in to curb Visa's dominance in the market, he declined to comment.
Meanwhile, the bank launched a digital credit card, wherein a digital native youth can get the card within two minutes by filling the details online.
Rao said the cost per customer acquisition for the digital card Christine 'Pixel' will be 50 percent less than the cost associated with the physical card.
The bank is offering several benefits like up to 5 percent cashback when shopping on select brands and the minimum charge for the base version of the card is Rs 250.
Currently, the card has been launched in partnership with Visa, Rao said, adding that the bank will launch similar offers with other networks in a few months.He said the bank's PayZap, which currently has 10 million registered customers, will initially serve as the go-to app for digital cards, but efforts are underway to offer it on other platforms as well.
Emphasizing the need to increase the credit card user base, Visa's newly appointed country manager Sandeep Ghosh said India has only 100 million credit cards, much less than the 400 million in Brazil, which is smaller in population size.
Parag Rao, head of payments and consumer finance at HDFC Bank, said the bank is investing in digital capabilities amid "cloudification", where functions are moved to the cloud.
The comments come amid greater regulatory scrutiny on the technology front.
“We spend around 6-7 per cent of our total spend on technology,” he told reporters at the bank's digital credit card launch here.
He said that when capital expenditure is high, initially the expenditure increases and then gradually decreases.He said about 50 percent of the expenditure is on employees, while the rest is on aspects like hardware, software and maintaining the network.
It may be noted that HDFC Bank was the first major lender on which business restrictions like issuing new credit cards and launching new online products were imposed two years ago.
It had to work on the system before the restrictions were completely lifted.
Asked about the Reserve Bank's recent move to allow customers to choose between card networks, Rao said he did not think it would have any impact on any business.
He said that at the industry level, lenders are currently discussing several other aspects with the regulator as it feels there are certain aspects on which some clarity can be provided.When asked whether the card switching rule was brought in to curb Visa's dominance in the market, he declined to comment.
Meanwhile, the bank launched a digital credit card, wherein a digital native youth can get the card within two minutes by filling the details online.
Rao said the cost per customer acquisition for the digital card Christine 'Pixel' will be 50 percent less than the cost associated with the physical card.
The bank is offering several benefits like up to 5 percent cashback when shopping on select brands and the minimum charge for the base version of the card is Rs 250.
Currently, the card has been launched in partnership with Visa, Rao said, adding that the bank will launch similar offers with other networks in a few months.He said the bank's PayZap, which currently has 10 million registered customers, will initially serve as the go-to app for digital cards, but efforts are underway to offer it on other platforms as well.
Emphasizing the need to increase the credit card user base, Visa's newly appointed country manager Sandeep Ghosh said India has only 100 million credit cards, much less than the 400 million in Brazil, which is smaller in population size.
