After a record high of ₹1.48 lakh crore in August, credit card spends dipped 4.23 per cent to ₹1.42 lakh crore in September, which is also lower than the ₹1.45 lakh crore registered in July. 

Most major issuers, barring IndusInd Bank, registered a decline in spends during September, with the top four issuers seeing a decline of 2-9 per cent. SBI saw the highest decline at 8.9 per cent, followed by Axis Bank at 8.4 per cent, according to RBI data.

The fall in spends was likely due to consumers curtailing transactions on expectations of heightened spends during the festival season, which started from October this year, according to industry participants.

Reduced discretionary spending owing to elevated inflationary pressure is also likely putting the brakes on credit card spending. In the minutes for RBI’s October monetary policy meeting, Deputy Governor Michael Patra said there is growing evidence that inflation is undermining growth as people are not increasing discretionary spending, which is slowing the sales growth of corporations. 

As per the data, 65.3 per cent of credit card spends during September were for e-commerce payments, a slight increase from 64.4 per cent last month. On the other hand, the share of PoS (point-of-sale) transactions fell to 34.7 per cent from 35.6 per cent in August.

IndusInd Bank saw a 10.9 per cent month-on-month increase in spends whereas some other banks such as Canara Bank, Union Bank and DBS Bank saw spends rise 4-8 per cent, albeit on a smaller base.

Cards outstanding at record high 

Even as spends declined, credit cards-in-force touched a new high of 9.3 crore in September, after crossing the 9-crore mark in August.

Outstanding number of cards rose 1.9 per cent or 17.4 lakh, higher than 1.6 per cent or 14.1 lakh cards in August, led by a steady increase in cards of large and mid-sized private banks and large PSU banks.

Among the top issuers, ICICI Bank led in terms of increase in number of cards for the second straight month, adding 3.5 lakh cards during the month to take the total to 1.56 crore cards. In August, the bank had added 3.09 lakh credit cards.

HDFC continued to maintain its position as the largest card issuer with cards-in-force at 1.88 crore, seeing an increase of 3 lakh cards during the month. IDFC First Bank, Kotak Mahindra Bank and RBL Bank were the other issuers to see strong net addition of cards.