Growth in credit card portfolio tapering down on account of concerns over delinquencies

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Growth in credit card portfolio is tapering down in the first half of the current fiscal compared to the same in the last two years. The decrease is being driven in the number of new account volumes and also a cautious approach adopted by the players in the card space over concerns pertaining to the delinquencies

As per the Reserve Bank of India (RBI) data, the growth in total outstanding portfolio under credit cards was lower at 18 per cent in the first half of the current financial year (till Sept 20,2024) compared to the same period in the last fiscal year. In the second quarter of FY24 and F23, the growth in the credit outstanding was 29 per cent and 27 per cent respectively. 

SBI Card

The data of SBI Card shows a 21 per cent decline in new card issues (new account). The new account volumes decreased by about 5 lakh in the second quarter of FY25 at nine lakh compared to 14 lakh in the corresponding quarter of the previous financial year. 

According to Abhijit Chakravorty, MD & CEO, SBI Card, the company would “continue to be selective and focused on quality of acquisition and will continue to be in this range in the near term.’‘

SBI Card continues to be India’s second largest credit card player, with CIF market share at 18.5 per cent, as per RBI September 2024 data.  

ICICI Bank

Even though there was a dip in the growth, ICICI Bank wants to proceed cautiously while ensuring growth as a credit card is a very core product when one looks at a bank – customer relationship.

”This is definitely a business we would want to continue to grow. But over a period of time, we have taken various steps in terms of the sourcing pattern. And, while we see an increase in delinquencies and credit costs , it continues to be a very profitable and growing business,’‘ Anindya Banerjee, Group Chief Financial Officer, ICICI Bank, said. 

Macro economic factors

The experts observe that the credit card industry has been witnessing an increase in delinquency levels on account of macro economic factors which have impacted the repayment capacity of borrowers. As per recent RBI reports, these factors include increase in household debt and excess leverage through retail loans

“The latest data from the credit bureau suggests that the card industry delinquencies increased gradually during FY 24 and have increased even more sharply in the first half of FY 25,’‘ said a senior banker.