Banks see net reduction of 2.9 lakh credit cards on RBI’s inactive card diktat

Kotak Mahindra Bank was the largest acquirer with 192,000 new cards. Credit card spends in the industry increased by 9% month-on-month and 53% year-on-year to ₹1.2 trillion in September, up 27% on a three-year CAGR basis.

Axis Bank, SBI Card and ICICI Bank saw strong month-on-month growth at 28%, 19% and 18%, respectively. Monthly spending per card for the industry increased by 9% month-on-month to ₹15,800, much higher than pre-Covid levels. Ticket size improved to ₹5,000, while the number of transactions per card grew to 3.2.

Kotak Mahindra Bank reported strong growth of 76.2% y-o-y, followed by RBL Bank (32.3%), SBI Card (17.9%), and Axis Bank (17.4%). HDFC Bank continues to be the largest player with a market share of 21%, a decline of 203 bps y-o-y.

“Spends remained strong and continued their healthy momentum over, led by the rising share of e-commerce transactions, which will keep growth in spends buoyant. While cards additions may see some divergence as banks comply with RBI’s guidelines, incremental sourcing is likely to remain strong. Players such as SBI Card, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank will continue their strong performance,” the report said.

Meanwhile, the robust growth in UPI payments continued, with total payments growing 70.6% year-on-year to ₹11.2 trillion in September. Ticket size stood broadly stable at ₹1,650. UPI’s market share has been constantly increasing and stood at 84% in the first six months of FY23 from a mere 9% in FY18, while the share of debit and credit cards stood at 5% and 9%, respectively.