Banks see over 15% growth in new credit card addition: RBI data

According to RBI data, the total number of active credit cards in India continued to grow, with banks adding over 9.2 lakh new cards in August 2024. This marks an increase from the 7.55 lakh cards added in July, bringing the total credit cards in circulation to 10.55 crore. YoY credit card additions grew by 15.6%, with a 0.9% sequential increase. HDFC Bank led the market with 2.41 lakh new cards in August, bringing its total to 2.19 crore, though this was lower than the nearly 4 lakh cards it added in July. ICICI Bank followed with 1.45 lakh new cards, bringing its total base to over 1.75 crore. Axis Bank added 1.27 lakh cards, while SBI Cards issued 1.1 lakh new cards.

Despite the growth, analysts have noted a cautious approach from lenders due to RBI’s risk-weight norms for unsecured loans. Banking analyst at IDBI Capital, Mr. Bunty Chawla, highlighted a 22.3% MoM rise in net new cards for August 2024 but a 34.3% decline YoY. Under an RBI ban for technology-related issues, Kotak Mahindra Bank saw its total credit cards fall by 61,191 in August to 54.13 lakh. In April, the RBI prohibited Kotak from onboarding new customers and issuing new credit cards due to gaps in its IT systems. Additionally, credit card transaction volume growth slowed to 1.6% in August, with total spending declining by 2.6% MoM to US$ 20.21 billion (Rs. 1.69 lakh crore), down from US$ 20.68 billion (Rs. 1.73 lakh crore) in July. The RBI has raised concerns over risks in the unsecured loan segment, advising lenders to exercise caution when extending personal loans for consumption purposes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.