The Reserve Bank of India (RBI) has relaxed restrictions on HDFC Bank from issuing new credit cards, HDFC Bank has informed in its filing to exchanges.

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"We refer to our earlier intimations dated December 03, 2020 and February 02, 2021 with respect to the Order issued by Reserve Bank of India (RBI) dated December 02, 2020 (“Order”) addressed to HDFC Bank Limited (the “Bank”) on certain incidents of outages in the internet banking / mobile banking / payment utilities of the Bank over the past 2 years," the exchange filing said.

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"As a further update to the above intimations, we wish to inform you that the RBI vide its letter dated August 17, 2021 has relaxed the restriction placed on sourcing of new credit cards. The Board of Directors of the Bank has taken note of the said RBI letter," it further said.

"The restrictions on all new launches of the Digital Business generating activities planned under Digital 2.0 will continue till further review by RBI. We will continue to engage with RBI and ensure compliance on all parameters," the exchange filing further said.

Amid the news, the brokerages have increased their expectations with respect to the stock price and have raised the price target.

Earlier in December 2020, the central bank had imposed bans on both issuing credit cards and launching news tech initiatives on the back of repeated instances of technological outages.

Macquarie says the ban has been lifted before the festive season which starts from September, and it sees the company rolling out attractive credit card schemes with full force. The brokerage strongly believes this is the best franchise to own in the financial space. HDFC Bank will regain its market share, it adds.

The brokerage has maintained an Outperform call on HDFC Bank and expects the share price to grow till Rs 2005 per share. It also says, the bank has a large customer base to which they can cross-sell.

While JPMorgan has an Overweight call on HDFC Bank with a target at Rs 1,800 per share. It says, RBI’s reluctance to give a complete waiver for all digital initiatives is negative. The bank will need to raise technology spend materially and the partial ban would delay normalcy in new tech initiatives.

The stock on Wednesday gained most at the market open by surging almost 3 per cent to Rs 1564.75 per share on the BSE, as compared to a 0.5 per cent rise in the BSE Sensex.