Spends on credit cards moderated in April 2024 from the previous month, declining 4.84 per cent to ₹1.56-lakh crore, according to data by the Reserve Bank of India.
Spends in April traditionally see a fall, given that spends generally tend to be higher in the last month of a financial year. Spends in March 2024 were at ₹1.64-lakh crore, also lower than the peak of ₹1.79-lakh crore seen in October 2023 due to festival season-related spending.
Growth in spends slowed from 25.9 per cent y-o-y in April 2023 to 17.9 per cent in April 2024. However, the number of card transactions grew 32.7 per cent on year to 344-lakh crore, likely due to linking of credit cards to UPI.
Going south
Spends for the top 4 issuers — HDFC Bank, SBI, Axis and ICICI Bank — fell 1.5-7 per cent m-o-m. Indian Bank, CSB Bank, Federal Bank, Karur Vysya Bank, RBL Bank, South Indian Bank and DBS Bank also saw a significant drop in spends over the month. On the other hand, IDBI Bank and Union Bank saw a good rise in monthly spends.
“HDFC Bank lost another 46 bps m-on-m and 246 bps y-o-y, dropping to 26.1 per cent — the lowest since January 2018. Axis Bank has been a gainer in terms of market share with a 30 bps m-o-m market share rise in spends volume,” Anand Rathi Research said in a note.
SBI cards saw the highest spends market share, with a 54 bps on month increase and 15.7 per cent market share, still lower than the peak of 19.8 per cent in October 2023, it added.
Market share down
The top 4 credit card issuers saw a decline in their market share during FY24, both in terms of monthly card spends and total cards outstanding. Their market share in terms of spends declined to 71.98 per cent as of March 2024 from 74.79 per cent a year ago, both due to expansion in the overall spends base and accelerated growth seen by mid-sized players.
The industry saw net additions of 7.4 lakh cards in April 2024, taking the total number of cards outstanding to 10.25 crore cards — 0.7 per cent higher than March. The net addition was slower than the 12.02 lakh cards seen in March, largely owing to a slower pace of card additions for most top issuers barring HDFC Bank.
“In April 2024, the industry added cards at the slowest pace since December 2022. Cards-in-force declined 39 per cent on year”, the note said, adding that SBI lost 95 bps market share on year with card additions falling for the second month in a row. HDFC Bank’s share rose 8 bps on month, whereas that for ICICI Bank fell 7 bps and Axis Bank by 9 bps.
HDFC Bank net added 2.3 lakh cards during the month, higher than 1.9 lakh cards in March. Bank of Baroda, IDFC First Bank, IndusInd Bank, YES Bank and AU Small Finance Bank were some other lenders to see a significant rise in their total cards-in-force for the month.
While other issuers too saw an increase, the pace of new card issuances was lower than previous months. Part of this slowdown is likely due to the revised norms on co-branded cards issued by RBI and the consequent restrictions imposed on lenders such as South Indian Bank and Federal Bank.
The top 4 issuers had a total of 7.06 crore cards-in-force as of March 2024, up from 6.09 crore in the previous year. However, their market share fell to 69.40 per cent from 71.37 per cent a year ago. The industry saw net card additions of 1.6 crore during FY24, of which the top 4 issuers accounted for 97.62 lakh cards. Total number of cards outstanding stood at 10.18 crore at end of FY24.