Credit card spending has slowed as a result of rising covid-19 cases and ensuing lockdowns, which will be reflected in May spending as well.
According to Reserve Bank of India (RBI) data analysed by Motilal Oswal Financial Services, the Indian banking system reported net additions of around 211,000 new credit cards in April, a decrease of 47 percent from the previous month.
Total credit card base increased 8.5 percent year on year (y-o-y) to 62.3 million, up from 7.5 percent y-o-y in March. Meanwhile, credit card spending fell 18 percent month on month to Rs 59,400 crore in April, but increased 183 percent year on year due to a low base in April last year, according to the report.
In April, ICICI Bank reported the lowest month-on-month decline of 12.5 percent, while other major players reported a 15-21 percent drop, owing primarily to the lockdown in various states over the previous few months.
Among major players, ICICI Bank reported 18% year-on-year growth in outstanding cards, followed by IndusInd Bank (15.2%), RBL Bank (14.4%), and SBI Card (14.4%). (13.6% ). Foreign players such as Citi and American Express saw declines of 5.5 percent and 9.6 percent, respectively, according to Motilal Oswal’s report.
“Monthly spends per card for the industry fell to 9,500 from an average of 10,500 in the previous six months. This was primarily due to a decrease in the number of transactions per card to 2.5 from an average of 2.8 over a similar period,” the report continued.
Source – Livemint