Credit card spends surge 54% to Rs 77,981 crore in August
Market experts have expressed the hope that in the festive season, given the ease in restrictions spending will increase further.
Signaling a revival of consumer spending, credit card spends and the number of credit cards has seen a spike in August this year compared to that in the corresponding month last year. While the number of cards rose by 10% to 6.4 crore, the total spends increased 54% to Rs 77,981 crore, according to the latest data available with the Reserve Bank of India (RBI). Month-on-month, credit card spending rose 4% in August from Rs 75,119 crore in July.
Return of consumer spending
Market experts have expressed the hope that in the festive season, given the ease in restrictions due to the drop in Covid cases, spending will increase further.
The Economic Times in a report quoted Parag Rao, Group Head – Payments, Consumer Finance, Digital Banking, and IT, HDFC Bank, as saying that the bank was seeing “significant revival” on the ground, which showed that consumer spending has returned. He added that offers extended by HDFC Bank during this season were not just to welcome their clients ‘with a bang’ but also to further catalyse the country’s ‘consumption story’.
HDFC Bank has the highest market share in credit card spending at 26.5% in August, while the total number of its credit cards issued stood at 1.47 crore.
With an eye on the big offline shopping season, several banks have come up with attractive offers on their credit cards. Experts believe, according to data, retail consumers have been saving to spend during the festive season (Navaratri starts from Thursday), with great sales expected in the electronics segment, particularly on smartphones and other gadgets.
ICICI Bank is No 2
According to RBI data, ICICI Bank replaced SBI now possessing the second biggest market share in the credit card segment. ICICI Bank’s credit cardholders spent Rs 14,355 crore in July which rose to Rs 15,271 crore in August this year. The bank also added 2 lakh fresh credit cards in August and now has 1.14 crore credit cardholders. Credit cardholders of Axis Bank spent Rs 6,848 crore in August this year.
The news report quoted Kunal Shah of ICICI Securities as saying that with things getting back to normal in most parts of the economy, there was a belief that retail credit cards were likely to grow at a rate of 10-12.