HDFC Bank will resume issuance of new credit cards as the Reserve Bank of India (RBI) has lifted the ban imposed on the private sector lender more than eight months back.

Though the RBI ban on launching new technology initiatives remains, HDFC Bank will be greatly relieved in being allowed to operate freely in the credit card market. Though still remaining the largest credit card player, HDFC Bank had seen rivals like ICICI Bank and SBI Card make major gains when it was shut out of the growth market. While its outstanding credit cards drop from 15.38 million in November-end to 14.83 million until June end, ICICI Bank moved up from 9.71 million to 11.03 million and SBI Card from 11.29 million to 12.04 million during this period.

“The RBI has partially lifted the restrictions on HDFC Bank. While it has been allowed to sell new credit cards, the restrictions on launching other digital initiatives continue. The bank received the communication from the RBI on Tuesday,” a source familiar with the development said.

On 2 December, the RBI had directed HDFC Bank to temporarily halt all launches of its digital business generating activities under ‘Digital 2.0’, along with sourcing new credit card customers. The order had come after the private sector lender suffered its third big outage within two years. The bank’s existing users were, however, not impacted by the ban.

On 17 July, HDFC Bank managing director and CEO Sashidhar Jagdishan had said that the bank has complied with 85% of the RBI's requirements on the improvements desired. He had also stated that a technology audit is also over and the RBI will now be "independently" taking a view on when to lift the penal actions taken against the bank.