NEW DELHI — As festive season saw robust growth in India across all parameters, credit card spending crossed INR 2 lakh crore in October, a 14.5 per cent rise from September.
According to latest data by the Reserve Bank of India (RBI), credit card spending in October reached INR 2.02 lakh crore, up 13 per cent (year-on-year).
As per the Central Bank’s data, outstanding credit cards in the system increased 12.85 per cent to 106.88 million, a 0.74 per cent increase from September.
HDFC Bank led the chart with issuing 241,119 credit cards, followed by SBI Cards with 220,265 cards and ICICI Bank with 138,541 cards.
Meanwhile, as UPI-based digital payments surge, debit card-based transactions dropped almost 8 per cent from nearly INR 43,350 crore in August to about INR 39,920 crore in September, according to the RBI’s monthly data.
On the other hand, credit card transactions grew in the country, which saw a nearly 5 per cent increase in the month of September at INR 1.76 lakh crore, from INR 1.68 lakh crore in August.
As per market experts, the growth in credit card spending is driven by a lower base in the previous year and the festival season as there has been an uptick in promotional schemes like equated monthly instalments during the festival season.
The share of digital payments more than doubled from 14-19 per cent in March 2021 to 40-48 per cent in March 2024, with unified payments interface (UPI) playing a key role.
The UPI transactions have grown at a stellar pace of 75 per cent Compound Annual Growth Rate (CAGR), while UPI spends surged at 68 per cent CAGR in the August 2019-August 2024 period, as the card industry’s growth remained tepid.
The immense popularity of UPI is seen from the transaction volume ratio which stands at 38.4 times of credit card transaction volumes, according to a recent report by Axis Securities.
However, given the lower ticket size of UPI transactions, the UPI-to-Credit Card spends stood at 0.3 times in August, which is largely stable at current levels