Credit card spending in India has reached an all-time high, increasing to Rs 1.78 lakh crore, representing a whopping growth of 25.35% from September 2023, fueled by robust consumer activity during the festive season, with a notable focus on electronic platforms.
The data from the Reserve Bank of India shows a robust growth of 38.3% per annum and 25.4% per month in total credit card spending. Within this, spending at point of sale terminals witnessed a solid 16% month-on-month increase, reaching Rs 57,774 crore. At the same time, e-commerce platform spending has seen significant growth, soaring 30% month-on-month to a staggering Rs 1.2 lakh crore.
Major players in the credit card industry reported large increases in transactions. HDFC Bank, the market leader, saw its credit card transactions climb from Rs 38,661.86 crore in September to Rs 451,73.23 crore in October. ICICI Bank and Axis Bank also witnessed notable increases, reaching Rs 34,158 crore and Rs 21,728.93 crore, respectively. SBI Cards, issued by the public sector lender, reported transactions of Rs 35,406.01 crore, up from Rs 24,966.69 crore in September.
In addition, the total number of credit cards issued by domestic lenders increased by 1.69 million in October, reaching a total of 94.71 million compared to 93.02 million in September. HDFC Bank maintained its dominant position, boasting 19.18 million cards in October, a slight increase from 18.83 million the previous month. SBI Cards held 18.07 million cards, ICICI Bank 16.01 million, and Axis Bank 13.30 million.
Moderation ahead?
While the growth in credit card transactions in October was undoubtedly influenced by the start of the festive season and increased consumer activity, there are indications that the industry may experience moderation in loan growth. This follows the recent directive of the Reserve Bank of India, encouraging commercial banks and non-bank financial companies to increase the risk for unsecured lending. This move is aimed at addressing concerns raised by regulators about some segments of unsecured loan products.