Credit cards breach the 100 million mark in India, shows RBI data

But overall credit card spending saw a sequential drop in February due to considerable decline in point of sale and e-commerce payments

The total number of credit cards issued by banks in India surpassed the 100 million mark in February 2024, with 1.1 million card additions from the previous month.

As of February, the outstanding number of credit cards in the system was 100.60 million, latest data released by the Reserve Bank of India showed. In February 2023, 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,” said Saurabh Bhalerao, associate director, CareEdge Ratings.

HDFC Bank is the leader in credit card issuances, with the lender’s cards in circulation standing at 20.40 million. Other major players include SBI Card with 18.75 million cards, ICICI Bank with 16.84 million, and Axis Bank with 13.90 million.

On the other hand, the overall credit card spending among Indians has moderated to Rs 1.49 trillion from Rs 1.66 trillion in January 2024 owing to considerable decline in point of sale (PoS) and e-commerce payments.

While PoS transactions dropped to Rs 54,431.48 crore from Rs 58531.77 crore in January 2024.

Meanwhile, e-commerce payments declined to Rs 0.95 trillion from Rs 1.08 trillion as the festive season came to an end.

“Generally October to December are festive months with slight spillover in January as well. As the season comes to an end, the spending is likely to have moderated,” Bhalerao added.

Transactions of leading credit card issuers also witnessed a decline.

Transactions via HDFC Bank’s credit cards dropped 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, overall, credit card transactions in February 2024 reported a 26.27 per cent year-on-year growth from Rs 1.18 trillion in February 2023, indicating a robust expansion from the year ago period.

According to analysts, 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,” noted Ajit Velonie, Senior Director of CRISIL Ratings.