RBI Data Reveals 15% Surge In New Credit Card Additions Across Banks In August

HDFC Bank, the leading player in the credit card market, topped the list by adding 2.41 lakh cards, bringing its total to 2.19 crore. In July alone, it added nearly 4 lakh cards

Kotak Mahindra Bank, currently under an RBI ban due to tech-related issues, experienced stagnation in its credit card portfolio

Source : Pexels

The total number of active credit cards in India continues to rise, with banks adding over 920,000 new cards in August, according to the Reserve Bank of India data. This follows the addition of 755,000 cards in July. As a result, the total number of credit cards in circulation has reached 105.5 million. Year-over-year, new credit card additions have increased by 15.6 per cent, and there’s been a 0.9 per cent rise compared to the previous month.

HDFC Bank, the leading player in the credit card market, topped the list by adding 2.41 lakh cards, bringing its total to 2.19 crore. In July alone, it added nearly 4 lakh cards.

ICICI Bank followed as the second-largest contributor, adding 1.45 lakh new credit cards in August, which raised its total to over 1.75 crore. Meanwhile, Axis Bank added 1.27 lakh new cards, and SBI Cards contributed 1.1 lakh cards, according to RBI data.

Kotak Mahindra Bank, currently under an RBI ban due to tech-related issues, experienced stagnation in its credit card portfolio, which remained at 54.13 lakh. The bank saw a decline of 61,191 cards in August, down from 54.74 lakh in July, according to the central bank’s data.

In April, the banking regulator directed Kotak Mahindra Bank to halt onboarding new customers through its online and mobile banking channels and stop issuing new credit cards. This decision was made after the bank failed to address significant gaps in its information technology systems, which had led to frequent outages in its core banking and online services over the past two years, causing customers inconvenience.

Additionally, transaction volume growth slowed to 1.6 per cent in August 2024, with all major players experiencing a decline in this area during the review period. Total credit card spending also dropped, reaching Rs 1.69 lakh crore in August, down from Rs 1.73 lakh crore in July.

Credit card spending fell by 2.6 per cent month-on-month, a significant decline compared to the 8.7 per cent growth recorded in the previous month. The RBI has highlighted increased risks in the unsecured lending segment, urging banks to be cautious when extending personal loans for consumption purposes.

In response to the stress in this area, the RBI raised risk weights on unsecured consumer credit and bank credit to non-banking financial companies (NBFCs) on November 16, 2023.