Credit Card Growth Accelerates with Over 9.2 Lakh Additions in August 2024

Credit Card Growth Accelerates with Over 9.2 Lakh Additions in August 2024

Indian banks continued their strong momentum in credit card issuance, adding more than 9.2 lakh new credit cards in August 2024, according to the latest data. This marked a significant increase from the 7.55 lakh cards issued in July, bringing the total number of active credit cards in circulation to 10.55 crore. Year-on-year, new credit card additions saw a robust 15.6% growth, with a 0.9% sequential increase from the previous month.

HDFC Bank led the credit card expansion in August, issuing 2.41 lakh new cards, boosting its total tally to 2.19 crore cards. This followed an impressive addition of nearly 4 lakh cards in July, cementing its position as the largest player in the credit card market. ICICI Bank followed closely, adding 1.45 lakh cards in August, with its total base reaching over 1.75 crore cards. Other key players such as Axis Bank and SBI Cards added 1.27 lakh and 1.1 lakh cards, respectively.

In contrast, Kotak Mahindra Bank continued to feel the impact of restrictions imposed by the banking regulator earlier in the year. The Reserve Bank of India (RBI) had halted the bank’s ability to onboard new customers and issue fresh credit cards due to persistent IT system issues that had caused disruptions in services.

Despite the surge in card issuances, growth in transaction volumes slowed in August, with only a 1.6% increase compared to the previous month. Total spending on credit cards declined by 2.6% month-on-month, falling to Rs 1.69 lakh crore in August from Rs 1.73 lakh crore in July.

The Reserve Bank has also raised concerns about rising risks in the unsecured loan segment, urging banks to adopt caution when extending personal loans for consumption purposes. Previously, in November 2023, the RBI had responded to these risks by increasing risk weights on unsecured consumer credit and bank lending to non-banking financial companies (NBFCs).