3x Jump In Credit Card Spending In 3 Years To Rs 18.31 Lakh Crore; HDFC, SBI, ICICI Top Issuers

Post-Covid, there has been a paradigm shift in the usage of credit cards. In three years, credit card spending jumped three-fold to Rs 18.31 lakh crore by the end of the March 2024 quarter, owing to resilient economic growth over the period. Also, the number of credit cards issued by banks has climbed by double digits to 10.18 crore, with HDFC Bank, SBI, and ICICI Bank being the top issuers.

Data from RBI showed that credit card spending stood at Rs 18.31 lakh crore, registering a growth of 190.63% or 2.91x from Rs 6.30 lakh crore spent as of March 2021. In FY23, the credit card transactions were at Rs 14.32 lakh crore, and Rs 9.71 lakh crore in FY22.

Furthermore, a number of credit cards issued jumped by over 64% to 10.18 crore by the end of FY24, as compared to 6.20 crore issued by the end of FY21. A total of 8.53 crore and 7.36 crore credit cards were issued by end of March 2023 and March 2022 period.

Currently, private banks take lead in the credit card issuance than public sector banks. At the top of the list is HDFC Bank which issued 2.11 crore credit cards by the end of FY24, followed closely by PSU giant State Bank of India (SBI) which issued 1.91 crore credit cards. Other leading private lenders such as ICICI Bank and Axis Bank issued about 1.7 crore and 1.43 crore credit cards.

Meanwhile, in FY24, bank credit growth (y-o-y) increased by 15.3%, net of merger (19.1% including the merger impact) during 2023-24 as compared to a 15.8% rise in the previous financial year. The share of female borrowers in the banking system has been rising gradually: they accounted for 33.6% of loan accounts and 23.4% of the amount of bank loans to individuals in March 2024.

Additionally, RBI data highlighted that private sector banks recorded over 15% growth for the third consecutive year - their share in total credit by SCBs rose to 40.6% in March 2024 from 33.4% five years ago and 19.4% ten years ago; the corresponding share of public sector banks declined to 51.8% from 73.2% ten years ago.

Moreover, scheduled commercial banks' credit growth has witnessed double-digit growth in May 2024.

Recent data from RBI also showed that on a year-on-year (y-o-y) basis, non-food bank credit registered a growth of 16.2% in May 20243 as compared with 15.5% a year ago.

However, personal loan growth moderated to 17.8% (y-o-y) in May 2024 from 19.1% a year ago, primarily due to decelerated growth in 'other personal loans'. Credit growth to 'housing', the largest constituent of the segment, accelerated.

Noteworthily, there has been surge in credit card outstanding as well which means that a significant number of customers did not repay their dues during the interest-free period offered by banks. Credit card outstanding stood at Rs 267,979 crore by end of May 2024, as compared to Rs 161,512 crore in 2022.

Last year, in November, the central bank had hiked the risk weight on banks exposures related to consumer credit, credit card receivables and NBFCs to 150%.