INSUBCONTINENT EXCLUSIVE:
3 min read Last Updated : Sep 27 2024 | 1:13 AM IST
Credit card spending is expected to pick-up on the back of discretionary spending
during the festival season, but the growth in spends could be subdued due to the regulatory eye on unsecured lending and rising
credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms.Click here to connect with us on WhatsApp
Nitin
Aggarwal, head of banking and financial research, Motilal Oswal Institutional Equities, said there is a possibility that the overall
this year is lower than previous years
adding that the (credit card) spending growth in FY25 is looking muted as there has been a sharp decline in corporate spends for select
India (RBI) shows that credit card spends in August 2024 increased 13.51 per cent year-on-year (Y-o-Y) to Rs 1.68 trillion from the year-ago
However, on a month-on-month basis, it was down 2.3 per cent
In July, spends topped Rs 1.72 trillion.
The largest credit card issuer, HDFC Bank, saw a 2 per cent drop in spends to touch Rs 43,440.85
spending is likely to pick up in the upcoming months
However, there are concerns regarding the increasing cases of delinquencies, and certain banks have reduced their credit card limits,
report, said that balance-level delinquencies in the credit card segment had seen a 17 basis points (bps) year-on-year rise in the quarter
ending June 2024 (Q1FY25), while delinquencies in other credit segments, including personal loans, saw a decline even as retail credit
growth moderated, consequent to banks tightening the supply of credit to the unsecured segments.
Data showed that the balance-level
delinquencies in the credit card segment stood at 1.8 per cent, the highest among all other credit segments.
Balance-level delinquencies
are measured in terms of 90 days or more past due
how the festival season would pan out for credit card spends.
According to Karan Gupta, director and head of financial institutions,
India Ratings, credit card issuers have become more cautious given the uptick in delinquencies.
Additionally, credit cards seeing
downgrades may also result in a slowdown of transactions, he said.
Meanwhile, the number of outstanding credit cards in August stood at
105.49 million, compared to 104.56 million in July.
In August 2023, outstanding credit cards stood at 91.3 million
The largest credit card issuer, HDFC Bank, had 21.9 million cards in circulation.First Published: Sep 26 2024 | 7:05 PMIST
