Credit card base could fall further

Font Size

Print

Feedback

Email

Discuss

• Discount UK Shopping

Related Articles

Sidbi growth on par with large banks: D&BPSBs plan to rev up their global portfoliosBank investments in MFs fall 75%SBI plans to raise up to Rs 20k cr

Mumbai: It is crunch time for the credit card industry. The credit card base may fall further in 2009-10 to about 226 lakh cards, from 246.99 lakh in March 2009 and 275.47 in March 2008.

According to a research by Venture Infotek Global on the credit card industry, the fall is primarily due to credit card issuers facing a crunch in their business. “With the increasing delinquency rate in the country, banks and card issuers are likely to remain hesitant in issuing new credit cards. Many banks have been closing inactive and unproductive accounts from their credit card portfolio,” the report added.

ICICI Bank, HDFC Bank, HSBC Bank, SBI and Citibank hold a share of over 80% in the credit card industry. ICICI Bank has the largest credit card base in the country with 70 lakh credit cards in the market till March 2009. However, its market share declined to 28% from last year’s market share of 33 %, since its cards in circulation dipped from 90 lakh a year ago to 70 lakh. HDFC and HSBC Bank are placed second and third after ICICI Bank, with market shares of 16 % and 14 % respectively. SBI, with a market share of 11 %, also showed a decline in the credit card base, compared to last year.

The market share of private banks has fallen to 47% in 2009 from 48% in the last fiscal. Private banks have also shown a decrease in their credit card base from 130.77 lakh cards in the previous year to 116.73 lakhs cards in March 2009. The market share of foreign banks increased from 34% in 2008 to 37% in 2009. While public sector banks hold a share of 15% in the marketwith 36.08 lakh credit cards, other banks, with a card base of 2.13 lakh, make up the remaining 1% of the market share, the report said.

Despite the decrease in the credit card base, credit card spends increased during 2009, since more and more people in the country are using credit cards to purchase essentials as well as luxury goods.