MUMBAI: India’s banking system reported net additions of around 211,000 new credit cards in April, down 47% from the previous month, according to Reserve Bank of India (RBI) data analyzed by Motilal Oswal Financial Services.
The total credit card base grew 8.5 percent year-on-year to 62.3 million, from 7.5 percent year-on-year growth in March. Meanwhile, credit card spending fell 18% month-on-month to Rs 59,400 crore in April, but jumped 183% year-on-year due to a weak base in April of the year. last, according to the report.
ICICI Bank recorded the smallest 12.5% ââmonth-on-month decline in April, while other major players reported a 15-21% drop, mainly due to foreclosures in various states in recent months .
Among the major players, ICICI Bank recorded strong 18% year-on-year growth in cards in circulation, followed by IndusInd Bank (15.2%), RBL Bank (14.4%) and SBI Card (13.6% ). Foreign players like Citi and American Express saw a decline of 5.5% and 9.6% respectively, Motilal Oswal said in the report.
âMonthly card spending for the industry has decreased to â¹9,500 on an average of â¹10,500 in the last six months. This is mainly due to a drop in the number of card transactions to 2.5, compared to an average of 2.8 over a similar period, “he added.
Most gamers, according to the report, saw a drop of Rs 1,500 to Rs 2,000 per card, with HDFC Bank, American Express and Citi seeing a larger drop of Rs 2,800 to Rs 3,800, while Kotak Mahindra Bank saw a modest drop.
âCredit card spending has been subdued due to the increase in covid-19 cases and the resulting blockages, which would continue to be reflected in spending in May as well. However, an increasing share of e-commerce transactions and a gradual recovery in other segments would allow spending to grow at a better pace in the medium term, âhe said.
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