26 Jun , 2021 By : Kanchan Joshi
MUMBAI: The Indian banking system reported net additions of around 211,000 new credit cards in April, down 47% from the previous month, according to data from the Reserve Bank of India (RBI) analysed by Motilal Oswal Financial Services.
Total credit card base rose 8.5% year-on-year (y-o-y) to 62.3 million as against a 7.5% y-o-y growth in March. Meanwhile, credit card spends fell 18% month-on-month to Rs59,400 crore in April, but surged a massive 183% on year due to a low base in April last year, the report said.
ICICI Bank reported the lowest decline of 12.5% month-on-month in April, while other major players reported a 15-21% dip, mostly a result of the lockdown in various states over the last few months.
Among major players, ICICI Bank reported strong growth of 18% y-o-y in outstanding cards, followed by IndusInd Bank (15.2%), RBL Bank (14.4%), and SBI Card (13.6%). Foreign players like Citi and American Express witnessed a 5.5% and 9.6?cline, respectively, Motilal Oswal said in the report.
“Monthly spends per card for the industry declined to Rs9,500 from an average of Rs10,500 over the past six months. This was primarily due to a decline in the number of transactions per card to 2.5 from an average of 2.8 over a similar period," it added.
Most players, the report said, saw a decline of Rs1,500-2,000 in spends per card, with HDFC Bank, American Express and Citi witnessing a higher decline of Rs2,800-3,800, while Kotak Mahindra Bank saw a modest dip.
“Credit Card spends moderated due to rising covid-19 cases and ensuing lockdowns, which would continue to reflect in May spends as well. However, a rising share of e-commerce transactions and a gradual recovery in other segments would enable spends to grow at a better pace in the medium term," it said.
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