Latest Reserve Bank of India (RBI) data published recently showed credit card additions fell almost 50% year-on-year in October, taking the total card base to about 107 million. Lenders added 786,000 new cards for the month over September.
“Net new card additions are expected to moderate in the near term due to rising delinquencies in the credit card receivables,” said Bunty Chawla, research analyst at IDBI Capital Markets. “Most lenders remain cautious on new card disbursements also due to RBI’s risk weight norms. Though we expect card spends to remain range bound in the coming months.”
In October 2023, lenders had added 1.53 million credit cards. At the end of October 2023, credit cards in use totaled 94.7 million.
New cards issuance was majorly led by large players – HDFC Bank, SBI Cards, and ICICI Bank. Together, they added about 600,000 cards.
The credit card segment has slowed progressively in the past six months. At the end of October 2024, credit card outstanding expanded 17% versus 26% growth in March 2024. Also, unsecured credit growth has slowed significantly – from more than 25% seen last year to below15% now.”In credit cards, the middle-income category is beginning to default, especially after the route of taking personal loans and paying off credit card dues or other dues is disappearing post the RBI clampdown,” said Suresh Ganapathy, Head of Financial Services Research, Macquarie Capital. “There is an issue with the middle class, and the urban slowdown is for real.”
