Credit card spends in Dec cross Rs 1 trillion for 10th month in a row

After a sequential fall in November, due to high base and waning of the festival season effect, credit card spends have picked up again in December, recording over Rs 1 trillion for the 10th consecutive month.

Latest figures released by the Reserve Bank of India (RBI) show that credit card spends in December 2022 touched Rs 1.26 trillion, up 10.21 per cent compared to November.

And, on a year-on-year (YoY) basis, spends were up 34.31 per cent during this period.

While HDFC Bank’s spends increased by 9.32 per cent month-on-month (MoM), ICICI Bank saw spends go up by almost 13 per cent.

Similarly, SBI Card and Axis Bank spends increased by 13 per cent and 8.8 per cent, respectively, during this period.

Spends have consistently topped the Rs 1-trillion mark, on the back of rising share of e-commerce transactions.

Also, travel and hospitality spending has come back strongly after a subdued show during Covid.

This recovery is aiding growth in credit card spends.

In fact, credit card spends touched an all-time high of Rs 1.29 trillion in October 2022 due to festive season spending.

Meanwhile, net addition of cards has dropped considerably in December, with just 580,555 cards added by the banking system.

This has taken the outstanding credit cards in the system to 81.18 million.

On an average, the industry has been witnessing a net addition of over 1.5 million credit cards monthly.

This is because companies have become aggressive in the unsecured lending business after the pandemic.

The progress excludes the two months when the industry saw a net reduction in credit cards as RBI’s norms kicked in.

The norms mandated card issuers to deactivate credit cards inactive for a year.

The banking industry added about 1.3 million cards in November, and 1.66 million in October.

The net addition of cards in December was led by SBI Card, with 328,273 cards. It was followed by HDFC Bank, the largest credit card issuer in the country, which added about 230,000 cards.

Axis Bank, the fourth largest credit card issuer, added 149,006 cards in December while ICICI Bank added just 96,022 cards.

“We are at about 1.2 million in this quarter and the previous quarter was slightly under 1 million.

"That’s the kind of rate at which we are acquiring cards,” said Srinivasan Vaidyanathan, chief financial officer (CFO), HDFC Bank, in an analysts’ call after the bank’s earnings.

Another major credit card issuer, Kotak Mahindra Bank, issued 139,266 cards in December.

SBM Bank saw its outstanding credit card base deplete by 735,946 cards during this period.

“On credit cards, we had yet another good quarter. Our market share has been steadily growing, both on spends and cards in force,” said Virat Diwanji, group president and consumer banking head, Kotak Mahindra Bank, in an analysts’ call after the bank’s Q3 earnings.

Among the major players, HDFC Bank has a market share of 28.21 per cent in spends and about 21 per cent in credit cards in force (CIF).

It was followed by SBI Card with 18.77 per cent and 19.56 per cent, in spends and CIF, respectively.

Meanwhile, ICICI Bank had a market share of 16.35 per cent and 16.66 per cent in terms of spends and CIF, respectively.

Axis Bank’s market share stood at 9 per cent while CIF was 11.6 per cent.