
In a significant development, the Reserve Bank of India (RBI) has announced that the number of credit cards issued by Indian banks surpassed 100 million in February 2024. This represents a growth of 1.1 million cards since January, bringing the total number of active credit cards to 100.6 million. These figures are considerably higher compared to the same period in 2023.
Factors Contributing to the Rise in Credit Card Circulation
According to Saurabh Bhalerao, Associate Director at CareEdge Ratings, the increase in credit card circulation can be attributed to proactive banking strategies and evolving consumer spending habits. He acknowledged that the industry’s significant size may lead to a potential slowdown in growth, stating, “The growth rate may slow down given that the industry has now reached a significant size.”
Key Players in the Credit Card Market
HDFC Bank is leading the way in this trend, with 20.40 million credit cards in circulation. Other major contributors to the credit card market include State Bank of India (SBI) with 18.75 million cards, ICICI Bank with 16.84 million cards, and Axis Bank with 13.90 million cards issued as of February 2024. Collectively, these banks hold a significant portion of the total credit cards in circulation.
Decline in Credit Card Expenditure
Despite the increase in credit card issuance, overall credit card expenditure among Indians fell to Rs. 1.49 trillion in February 2024 from Rs. 1.66 trillion in January. This decline is primarily attributed to a decrease in point of sale (PoS) and e-commerce payments following the end of the festive season. Bhalerao explained this trend, stating, “As the season ends, it’s natural for spending to moderate.”
Decrease in Transactions for Major Credit Card Issuers
Major credit card issuers have reported a decline in transactions for February 2024. HDFC Bank’s transactions fell to Rs. 40,288.51 crore from Rs. 43,711.47 crore in January, while SBI saw a drop to Rs. 23,247.79 crore from Rs. 30,693.83 crore. ICICI Bank and Axis Bank also experienced a decrease in transactions during this period, reflecting the overall trend of reduced spending post-festive season.