Credit card spends jumped 57 per cent year-on-year (YoY) in September, aided by the festive season.
According to the latest Reserve Bank of India (RBI) data, in September, credit card spends totalled Rs 80,477.18 crore compared to Rs 77,981 crore in August, thereby registering a 3.2 per cent growth sequentially, despite the high base.
In the corresponding period last year, credit card spend was to the tune of Rs 51,356.68 crore.
In July, credit card spends were to the tune of Rs 75,119 crore.
Credit card spends are much higher than pre-pandemic levels.
In January and February of 2020, credit card spends were to the tune of Rs 67,402.25 crore and Rs 62,902.93 crore, respectively.
In an analyst call after the Q2 results, Sandeep Bakshi, managing director (MD) & chief executive officer (CEO), ICICI Bank, said, “Spends across most categories other than travel crossed March 2021 levels in September.
“We expect the momentum in spends to continue in the festive season.”
“The festive season has begun well and we expect further momentum,” said Amitabh Chaudhury, MD & CEO, Axis Bank, post the Q2 earnings.
Experts say, increased economic activity, coupled with the festive season, would keep the momentum in spends buoyant.
Monthly spends per card for the industry increased to approximately Rs 12,400 from an average of Rs 10,700 over the past six months, Motilal Oswal said in a report.
In September, HDFC Bank recorded card spends to the tune of Rs 20,221 crore, followed by ICICI Bank at Rs 17,268 crore, and SBI Cards at Rs 14,698 crore.
Also, the banking system reported more than a million (1.09 million) new credit card additions in September, up 10.8 per cent YoY.
This is the highest in the past 11 months, taking the number of outstanding credit cards to 65 million.
Among the large players, HDFC Bank, the biggest issuer of credit cards in the country, added 244,257 credit cards in September, followed by ICICI Bank with 233,628 cards, Axis Bank with 202,537 cards, and SBI Cards with 174,875 cards.
In August, around 520,000 cards were added to the system, led by ICICI Bank and SBI Cards.
One of the reasons for the spike in new card additions in September is the return of HDFC Bank into the market after eight long months.
In mid-August, the RBI lifted the embargo on HDFC Bank with regard to issuance of new cards.
Since then, the bank has expressed its intention to come back with a bang and regain the market share it lost during the last eight months.
ICICI Bank has been very aggressive in the credit card segment and it has added close to 2 million new cards in the past 10 months, taking its credit card base to 11.6 million as of September.
For ICICI Bank, its tie up with e-commerce giant Amazon has worked really well as their co-branded credit card has been a huge success in the market.
On the other hand, Axis Bank has added 630,022 cards during the same time.
Axis Bank’s co-branded credit card with Walmart backed e-commerce major Flipkart has also performed very well.
SBI Cards has added around 1.3 million new credit cards during the same time period.
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