Credit card issuance breaches 100 million mark in February: RBI

The total number of credit cards issued by banks have breached 100 million mark in February 2024. From the previous month, 1.1 million new cards were added in February.

As per RBI's latest data, the outstanding number of credit cards in the system was 100.60 million as of February. In the same month last year, the total cards in circulation stood at 99.5 million.

“The banks have been pretty aggressive in shoring up their credit card spending and there has also been changes in the spending pattern of the consumers over the years driving the credit cards in circulation. Going forward, the growth rate of the cards in circulation is likely to moderate considering the fact that the industry has reached a substantial size,” Saurabh Bhalerao, associate director, CareEdge Ratings told Business Standard.

Credit Cards in India

HDFC Bank leads in terms of credit card issuances with 20.40 million in circulation. Meanwhile, there are 18.75 million cards from SBI, 16.84 million from ICICI Bank, 13.90 million from Axis Bank.

However, the overall credit card spending has moderated to Rs 1.49 trillion from Rs 1.66 trillion in January 2024. This is due to the considerable decline in point of sale (PoS) and e-commerce payments.

The point of sale transactions dropped to Rs 54,431.48 crore from Rs 58531.77 crore in January 2024. Likewise the e-commerce payments also declined to Rs 0.95 trillion from Rs 1.08 trillion as the festive season came to an end.

The transactions of leading credit card issuers also declined with transactions via HDFC bank's transaction dropping to Rs 40288.51 crore in February from Rs 43711.47 crore in January. Similarly, ICICI Bank’s card transactions slipped to Rs 26,843.03 crore from 29,672.96 crore, and Axis Bank posted a fall in transactions to Rs 17,528.09 crore from Rs 20,305.45 crore. Transactions on SBI Card, issued by the public sector lender, dropped to Rs 23,247.79 crore from Rs 30,693.83 crore in January 2024.

However, the overall credit card transactions in February 2024 reported a 26.27% year-on-year growth from Rs 1.18 trillion in February 2023, indicating a robust expansion from the year ago period.

Business Standard quoted analysts and said that ,credit card usage is expected to see an increase owing to structural factors driving demand among consumers and strengthened systems from the lenders.

“We believe that credit card usage will continue to rise driven by structural factors such as greater digitalisation of financial transactions, ease of usage and greater comfort among consumers in relying on credit to fund their consumption needs. These drivers have elevated credit card usage from a demand side perspective. On the other hand, from a supply side angle, credit card issuers or lenders are also increasing their focus on the product and strengthening their systems and processes,” Ajit Velonie, Senior Director of CRISIL Ratings told the publication