In June, the highest growth was 30.7 percent. (representation)
New Delhi:
Credit card outstanding rose 29.6 per cent in January to an all-time high of Rs 1.87 lakh thanks to increased digitization and increased consumer confidence in the post-Covid era.
According to the latest data of the Reserve Bank, the outstanding volume of credit cards increased by more than 20 percent in 10 months of the current fiscal year.
In June, the highest growth was 30.7 percent.
“Many categories have been digitized, leading to increased spending by existing customers using their credit cards,” said Rama Mohan Rao Amara, MD and CEO, SBI Card.
The ease of payments has inevitably contributed to the increase in expenditure across categories including health and physical education, education and utility bills, he added.
On the monthly trends in credit card usage, Rama Mohan Rao Amara said that credit card spending has steadily increased in the last few months.
In January this year, it said the card spending was Rs 1.28 crore compared to Rs 1.26 crore in December 2022.
“If we look at the annual growth, there is a 45 percent increase. In fact, since the last 11 months, credit card spending has been consistently above Rs 1 lakh,” he added.
At the end of January 2023, there were approximately 8.25 million credit cards issued by various banks.
HDFC Bank, SBI Card, ICICI Bank, Axis Bank and Kotak Bank are the top five credit issuers in the country.
According to V Swaminathan, Executive Chairman, Andromeda Loans, while secured loans like mortgages and business loans are lagging behind these days, the personal loan segment is growing.
“New graduates entering the workforce are more financially savvy than their predecessors and are actively trying to improve their credit scores. As fintech companies contribute and share information online, young people are making more informed credit card purchases,” he said.
The Reserve Bank data further showed that the annual growth of credit cards in January 2023 was 29.6 percent against about 10 percent in the previous month. Since then, the outstanding amount has increased from Rs 1,41,254 crore in January 2022 to Rs 1,86,783 crore in January this year.
According to a recent RBI survey, consumer confidence has further improved both in the current period and for the year ahead.
The current situation index continued its recovery in the ninth survey round from a historic low recorded in mid-2021 and rose 1.3 points in January 2023 on the back of improved sentiment about overall economic conditions and household income, the survey said. February 8, the date of the announcement of the bimonthly monetary policy.
Rao further noted that e-commerce spending accounted for nearly 60 percent of total credit card spending in December 2022.
“So we’ve seen a normalization of overall spending, which is comparable and actually better than pre-Covid levels. And with the upcoming Holi and summer holiday season, we will see the momentum continue in the coming months. operating environment,” said a senior SBI Card official.
Swaminathan further said that during the pandemic, credit cards were mainly used to buy food and pay utility bills. Desired spending on fuel, travel and entertainment has fallen significantly.
“In 2023, with the economy returning to pre-pandemic conditions, there was a post-pandemic boost as people used their credit cards to travel, spend on fuel, renovate their homes, buy appliances, etc.,” he said.
At the end of January 2023, there were approximately 8.25 million credit cards issued by various banks.
HDFC Bank, SBI Card, ICICI Bank, Axis Bank and Kotak Bank are the top five credit issuers in the country.
(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)
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