The credit card outstanding rose by 29.6 per cent to Rs 1.87 lakh crore in January, all all-time high, according to latest data from the Reserve Bank of India (RBI), reported PTI. The record credit outstanding is on the back of increased digitisation and rising consumer confidence in the post-Covid period, the report said.
RBI data showed that credit card outstanding in January 2023 stood at Rs 1,86,783 crore as against Rs 1,41,254 crore in January 2022.
By the end of January 2023, almost 8.25 crore credit cards had been issued by various banks. The top five credit issuers in the country are HDFC Bank, SBI Card, ICICI Bank, Axis Bank, and Kotak Bank, the report said.
Rama Mohan Rao Amara, MD and CEO of SBI Card, told the news agency, “Many categories have been digitised which has resulted in increased spends from existing customers using their credit cards."
Rao said that the ease of payments has definitely contributed to this increase in spending in categories, including health and fitness, education, utility bills, among others.
"If one looks at year-on-year growth then there is a 45 per cent increase. In fact, since the last 11 months credit card spends have consistently stayed above Rs 1-lakh-crore mark," he said.
"So, overall, we have been seeing normalisation in spends which is comparable and in fact even better than pre-COVID levels. And with the upcoming Holi and summer holiday season, we may see the momentum continuing in the coming months too, depending on the operating environment," said the SBI Card's top official.
V Swaminathan, Executive Chairman of Andromeda loans, said while secured loans like mortgage loans and business loans have taken a backseat these days, the personal loan segment is growing.
"Fresh graduates, who are just entering the workforce, are more financially aware than their predecessors and are actively trying to build their credit scores. With more fintech companies building a presence online and sharing information, youngsters are making more informed credit card purchases," he said.
Swaminathan further said that during the pandemic, credit cards were primarily used to purchase groceries and pay utility bills. Discretionary spending on fuel, travel and entertainment dipped extensively.
"In 2023, with the economy returning back to its pre-pandemic state, people are using credit cards to travel, spend on fuel, renovate their houses, purchase appliances, and the like. Travel and entertainment are two of the broadest categories that picked up momentum after the pandemic," he said.