Credit card spending exceeds Rs 1 trillion for first time in a month: RBI

0


Driven by the euphoria of the festival season, credit card spending topped Rs1 trillion in a month for the first time in October, the latest figures released by the Reserve Bank of India (RBI) revealed on Thursday. .

Spending in October grew by more than 25 percent month-on-month, despite a strong base last month. Year over year, credit card spending jumped 56%. In the corresponding period of last year, credit card spending amounted to Rs 64,891.96 crore.

The highest monthly spending was recorded in September of this year at Rs 80,477.18 crore. The previous month spending amounted to nearly Rs 77,981 crore.

The expenses recorded in recent months have been much higher than those recorded before the pandemic. In January and February 2020, credit card spending was Rs 67,402.25 crore and Rs 62,902.93 crore respectively.

“Credit card spending has been quite robust in recent months due to a strong economic rebound. In addition, October was a month of festival. This could have led to higher growth in credit card spending, ”said Suresh Ganapathy, Managing Partner, Macquarie Capital.

Nitin Aggarwal, Vice President, Research-Banking, Institutional Equities, Motilal Oswal Financial Services, said: “Growth in credit card spending in recent months signals an economic recovery. Card acquisition rates have increased, strengthening purchasing power.

Besides online spending, physical spending has also returned this festival season. This trend may continue, given an under-penetrated credit card market and rapidly growing digital spend. Card acquisition is also expected to experience double-digit growth, with HDFC Bank returning to the market, ICICI Bank and SBI Cards maintaining healthy growth, ”Aggarwal added.

Shyam Srinivasan, Managing Director and CEO of the Federal Bank, said, “Retail lending is increasing, and so is credit card spending. This is a constant increase, not a wild pattern. The bank will develop the credit card portfolio in a calibrated manner.

Additionally, for the second month in a row, the banking system reported more than one million new credit card additions, bringing the number of cards in circulation in the system to 66.3 million. In October, 1.33 million new credit cards were added; in september, 1.09 million new cards were added. In August, 520,000 cards were added to the system, led by ICICI Bank and SBI Cards.

Among the big players, HDFC Bank, the country’s largest credit card issuer, added 258,285 credit cards in October. ICICI Bank added 278,189 cards; Axis Bank 219,533 cards and SBI Cards 183,960 cards.

The surge in credit card additions over the past two months can be partly attributed to HDFC Bank’s return to the credit card market. In mid-August, the RBI lifted the embargo on HDFC Bank concerning the issuance of new cards. Since then, the bank has expressed its intention to come back in force and regain market share lost during its eight-month ban.

Among the major credit card players, ICICI Bank has been the most aggressive. It added 2.25 million new credit cards in the past year, after HDFC Bank was banned by the RBI from issuing new credit cards. At the same time, SBI Cards added 1.46 million new credit cards and Axis Bank added 850,000 cards.

For ICICI Bank, their partnership with e-commerce giant Amazon has worked very well as their co-branded credit card has been a huge hit in the market. Axis Bank added 630,022 cards during the same period. His credit card co-branded with the large Walmart-backed e-commerce Flipkart also performed very well.


Share.

About Author

Comments are closed.