Credit card portfolio growth in India is tapering off in the first half of the current fiscal year, reflecting concerns over rising delinquencies and a cautious approach from financial institutions. According to data from the Reserve Bank of India (RBI), the total outstanding credit card portfolio grew by 18% until September 20, 2024, a significant drop compared to 29% and 27% growth in the same period for the previous two fiscal years.
SBI Cards reported a 21% decline in new card issuances, with new accounts falling to 900,000 in the second quarter of FY25, down from 1.4 million in the same quarter last year. Managing Director and CEO Abhijit Chakravorty stated that the company will maintain a selective approach focused on quality acquisitions.
ICICI Bank, while experiencing slower growth, emphasized the importance of credit cards in customer relationships. Group CFO Anindya Banerjee noted that despite rising delinquencies and credit costs, the credit card business remains profitable and essential for growth.
Experts attribute the increase in delinquencies to macroeconomic factors, including rising household debt and excessive retail loan leverage. Recent RBI reports indicate that delinquencies in the credit card sector have gradually increased during FY24 and sharply escalated in the first half of FY25.