Credit card default increases by 1.94% to Rs 4,072 crore in FY23-24

Credit card default rose to Rs 4,072 crore or 1.94 per cent at the end of March 2023, Parliament was informed on Tuesday.

"As per the inputs received from RBI, in respect of defaults in credit cards, the gross non-performing assets (GNPAs) in credit cards was Rs 3,122 crore in March-2022 and Rs 4,072 crore in March-2023, while credit card outstanding in March-2022 and March-2023 was Rs 1.64 lakh crore and Rs 2.10 lakh crore, respectively," Minister of State for Finance Bhagwat Karad said in a written reply in Rajya Sabha.

GNPAs in credit cards have declined from 3.56 per cent in March 2021 to 1.91 per cent in March 2022, and stand at 1.94 per cent in March 2023 against the schedule commercial banks' GNPA of 3.87 per cent in March 2023, he said.

Replying to another question, Karad said, the total number of frauds as reported by the cooperative banks during FY23 was 964 with amount involved to the tune of Rs 791.40 crore.

During FY22, the total number of fraud was 729 and the amount involved was Rs 536.59 crore as against 438 frauds involving Rs 1,985.79 crore in FY21, he said.

All cooperative banks are required to comply with the guidelines issued by the Reserve Bank of India (RBI) from time to time, he said.

Compliance to RBI guidelines issued to banks is examined on sample basis during the supervisory assessment of the banks and any non-compliance observed is taken up with the banks for rectification apart from initiating supervisory/ enforcement action against the bank, as deemed fit, he said.

RBI and NABARD have informed that they undertake measures for strengthening fraud risk management in banks, including issuing caution advises, advising banks for rotation and mandatory leave of staff, compliance monitoring, cyber security advisories, etc., he said.

In a separate reply, Karad said, as per inputs received from public sector banks, several steps have been taken to ensure ethical debt collection practices.

Banks conduct auction of the properties through online portals, as per their board approved policy framed under the guidance of fair practices code issued by Reserve Bank of India, and applicable laws and regulations of the SARFAESI Act, 2002, he said.

Banks also issue public auction notices of properties in two newspapers, i.e. in English as well as in vernacular local language, he said.

Further, he said, multiple valuations are obtained from empanelled/registered valuers to calculate reserve price of auction and the same is fixed with the approval of competent authority.

Besides, he said, RBI as part of its supervisory assessment, reviews adherence to its guidelines, and non-compliance observed are taken-up with banks for rectification apart from initiating supervisory/enforcement action, as deemed fit.