Credit card spending in India reached a historic high, surging to Rs 1.78 lakh crore, representing a substantial 25.35% increase from September 2023, fuelled by robust consumer activity during the festive season, with a notable focus on e-commerce platforms.
The Reserve Bank of India data shows a robust 38.3% year-on-year and 25.4% month-on-month growth 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. Concurrently, e-commerce platform spending experienced significant growth, soaring by 30% month-on-month to a staggering Rs 1.2 lakh crore.
Major players in the credit card industry reported substantial increases in transactions. HDFC Bank, a 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.
Furthermore, the overall 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 surge in credit card transactions in October was undoubtedly influenced by the onset of the festive season and heightened consumer activity, there are indications that the industry may experience a moderation in loan growth. This follows the Reserve Bank of India’s recent directive, urging commercial banks and non-banking financial companies to increase the risk weight for unsecured lending. This move aims to address concerns raised by regulators regarding certain segments of unsecured lending products.
