Credit card spends fall for first time in 5 months – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/money-and-banking/credit-card-spends-fall-for-first-time-in-5-months/article66307748.ece

Credit card spends had touched a peak of ₹1.29-lakh crore seen in October, as per data released by the Reserve Bank of India

The credit card industry has largely bounced back from the decline in number of cards seen in August and September, after the RBI mandated banks to deactivate credit cards

Credit card spends were lower by 11 per cent in November, falling for the first time since July to ₹1.15-lakh crore, signaling a slowdown from the peak levels seen during the festival season.

Credit card spends had touched a peak of ₹1.29-lakh crore seen in October, as per data released by the Reserve Bank of India.

HDFC Bank saw a 13 per cent decline in its credit card spends from October, whereas SBI card saw a decline of nearly 10 per cent, ICICI Bank of 15 per cent and Axis Bank a 8 per cent drop, the bank-wise data showed.

Slowdown in new hiring

Lower discretionary spending and consumption is largely being led by factors such as possible slowdown in new hiring in the organised sector, withering of pent-up demand, elevated inflation sapping household savings, and an increase in mortgage EMIs, Kotak Institutional Equities said in a note.

However, credit card spends continued to be robust year-on-year, growing by 29 per cent. Card spends have shown strong growth in 2022, topping the Rs 1 lakh crore for the last nine straight months.

Cards-in-force bounce back

In terms of the number of cards, issuers added a total of 13 lakh cards during the month, lower than the 17 lakh cards added in October. This took the aggregate count to 8.1 crore credit cards as at the end of November.

The credit card industry has largely bounced back from the decline in number of cards seen in August and September, after the RBI mandated banks to deactivate credit cards — unused for over one year – with effect from July 1. Further, issuers are now also required to close cards that have not been activated for 30 days since issuance, effective October 1.

The net addition in cards-in-force during November was led by SBI Card, which saw cards increasing by 3.9 lakh, followed by HDFC Bank which saw an addition of 2.4 lakh cards, Axis Bank of 2.1 lakh cards. On the other hand, ICICI Bank saw a net reduction in its number by 1.1 lakh cards. The four banks account for over 60 per cent of the cards in the system.

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