According to the latest Reserve Bank of India (RBI) data, the number of active credit cards in India saw a continued rise in August 2024, with banks issuing over 0.92 million new cards. This is an increase from the 0.755 million cards added in July, pushing the total number of credit cards in circulation to 105.5 million. Year-over-year (YoY) credit card additions grew by 15.6%, with a sequential increase of 0.9%.
HDFC Bank led the market, issuing 0.241 million new cards in August, bringing its total to 21.9 million. However, this was lower than the 0.4 million new cards the bank added in July. ICICI Bank followed, issuing 0.145 million new cards, increasing its total base to over 17.5 million. Axis Bank and SBI Cards added 0.127 million and 0.11 million new cards, respectively.
Despite this growth, analysts have pointed out that lenders are becoming more cautious due to the RBI’s stricter risk-weight norms for unsecured loans. Bunty Chawla, a banking analyst from IDBI Capital, highlighted a 22.3% month-on-month (MoM) increase in net new cards for August, although YoY growth declined by 34.3%.
Kotak Mahindra Bank, which is currently under an RBI ban due to technology-related issues, saw a reduction in its total credit cards by 61,191 in August, lowering its base to 5.413 million. The bank has been unable to issue new cards or onboard new customers since April, following the RBI’s decision to halt its card operations due to IT system gaps.
Furthermore, the growth in credit card transaction volumes has slowed, increasing by just 1.6% in August. Credit card spending dropped 2.6% MoM, falling to US$ 20.21 billion (Rs. 1.69 trillion) from US$ 20.68 billion (Rs. 1.73 trillion) in July. The RBI has expressed concerns over the unsecured loan segment, advising lenders to exercise caution when extending personal loans for consumption purposes.
