Aided by festival season purchases, credit card spends touched an all-time high of Rs 1.29 trillion in October, the latest data released by the Reserve Bank of India (RBI) showed. This is 5.5 per cent higher than the previous month’s figure of Rs 1.22 trillion.
On a year-on-year (YoY) basis, spends were up over 25 per cent, despite a high base.
In October last year, credit card spends topped the Rs 1-trillion mark for the first time, buoyed by festival season spending.
After a net reduction in credit cards for the past two months as RBI norms mandated card issuers to deactivate credit cards that were inactive for a year, the banking system added over 1.66 million cards, taking the total credit card base to 79.36 million.
On average, the industry was witnessing a net addition of over 1.5 million credit cards a month as players became aggressive in the unsecured lending business after the pandemic, before the RBI norms kicked in.
The net addition was led by SBI Cards and Payment Services, which added 339,160 cards in October; it was followed by Axis Bank with 261,367 cards, and ICICI Bank with 221,280 cards. HDFC Bank, the largest credit card issuer in the country, added 217,979 cards during the month.
In the July-September (Q2) quarter, outstanding cards-in-force declined by 2.55 million. Among major issuers, HDFC Bank witnessed a net reduction of 1.62 million credit cards in Q2FY23.
Axis Bank reported a net reduction of a little over 1.10 million credit cards during this period, resulting in outstanding credits dropping to 8.82 million, from almost 10 million back in July. ICICI Bank lost 409,147 cards during Q2FY23.
Card spends have consistently topped Rs 1 trillion in the past eight months, led by the rising share of e-commerce transactions. Travel and hospitality spending, which were subdued due to the Covid pandemic, has come back strongly, aiding growth in credit card spends, experts said.
Among major players, HDFC Bank reported a spends market share of 29.02 per cent in October, followed by SBI Cards and Payment Services with 18.01 per cent, ICICI Bank with 16.78 per cent, and Axis Bank with 8.74 per cent market share.