Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the report showed.“We expect the growth slowdown to continue, given the tightened scrutiny and the impact of new RBI regulations. Further, with banks indicating some increased stress in their credit card portfolio, we continue to monitor the impact of the same on credit costs and asset quality”, said Macquarie Research in its report. Additionally, the net card additions in FY25 (up to August) has declined by 38.3 per cent as compared to growth of 41.3 per cent in FY24, the report said.
Comments
Post a Comment