The number of credit cards in force improved in October after falling in the previous two months on account of deactivation guidelines issued by the Reserve Bank of India (RBI) earlier.
The number of active credit cards of all banks put together improved by 2.1% in October to 793.7 lakh from 777.02 lakh in the previous month, as per RBI data. HDFC Bank, the market leader in the credit card space, added 2.2 lakh cards in October, while State Bank of India and ICICI Bank added 3.4 lakh and 2.2 lakh cards, respectively. These three banks together account for 57% of the credit cards in the system.
Axis Bank, which is in the process of acquiring the credit card portfolio of Citibank India, added 2.6 lakh cards in October. The credit card spends of the bank are growing at a good pace while the partnership with Flipkart is helping the lender to gain market share, Macquire Research said in a report. The bank is also launching new products and the Citibank acquisition should further give a fillip to this business, it further said.
The number of active credit cards in the system had fallen by 2.8% in August and 0.4% in September due to the norms. Overall, the number of active credit cards declined by 25 lakh in August and September. HDFC Bank was most affected as the lender saw active cards decline by 16.6 lakh in the two months. The RBI had issued directions to banks to deactivate credit cards which were inactive for 365 days. The banks have started the process to deactivate inactive cards after the guidelines became effective July onwards.
In terms of volume, the number of credit card transactions stood at 25.6 crore in October, higher by 4% compared to previous month. The number of credit card transactions in value terms was higher by 5% to Rs 1.3 trillion in October.
Per card spends also showed a modest improvement of 1.4% in October despite the festive season compared to 8.5% increase in September. Per card spends in October stood at Rs 5,050 per card in October compared to Rs 4,982 in the previous month. However, the per card spend for credit cards is still significantly higher than that for Unified Payment Interface (UPI). The ticket size for UPI for October was at Rs 1,658 rupees, as per data from the National Payments Corporation of India (NPCI).