By Shashank Didmishe
Credit card spends bounced back in May on a year-on-year basis after witnessing a contraction in April, led by healthy improvement in transactions on the e-commerce and point-of-sales (PoS) terminals. Overall credit card spending grew 8% month-on-month in May to Rs 1.14 trillion.
The credit card spending rose 118% YoY while the number of transactions grew 77% to 238 million, according to data released by the Reserve Bank of India (RBI).
Consumers spent Rs 71,400 crore on e-commerce platforms using credit cards in May, an increase of 8% YoY, while spends on PoS terminals improved 6% YoY to Rs 42,200 crore. The share of credit card spending on e-commerce platforms improved 60 basis points in May while the share of spending on PoS terminals fell.
Credit card transactions in April declined as it was a seasonally weak month for retail spending, analysts said, adding that the yearly trends on spending are expected to remain strong. The rising share of e-commerce transactions in credit card usage is likely to help maintain the growth in card spends, analysts at a domestic brokerage said in a report on Monday.
The total number of cards issued stood at 77 million as the banks issued 1.7 million credit cards in the month under review. HDFC Bank has maintained its leadership position, with the lender issuing 3.85 lakh credit cards during the month, taking the total number to 17.2 million.
State Bank of India, ICICI Bank and Axis Bank reported an increase in the number of cards issued in May. In contrast, private sector lender Kotak Mahindra Bank registered a decline – the bank issued 1.81 lakh cards in May, against 2.29 lakh issued in the previous month. Foreign banks, including CitiBank, Bank of America and Standard Chartered Bank, reported a decline in the number of cards issued during the month.