Credit card spend crosses Rs 1 trillion first time in a month: RBI

 Among major credit card players, ICICI Bank has been the most aggressive

Buoyed by the festival season euphoria, credit card spending for the first time crossed Rs 1 trillion in a month in October, revealed the latest figures released by the Reserve Bank of India (RBI) on Thursday.

Spends in October registered a growth of over 25 percent month-on-month, despite a high base of last month. On a year–on–year basis, credit card spending jumped 56 percent. In the corresponding period last year, credit card spending was to the tune of Rs 64,891.96 crore.

The earlier highest one-month spend came in September this year at Rs 80,477.18 crore. The month before, spending was nearly Rs 77,981 crore.

Spends recorded in the past few months have been much higher than that of pre-pandemic levels. In January and February of 2020, credit card spending was Rs 67,402.25 crore and Rs 62,902.93 crore, respectively.

“Credit card spending has been quite robust in the past few months owing to the strong economic rebound. Also, October was a festival month. That could have led to higher growth in credit card spending,” said Suresh Ganapathy, associate director, Macquarie Capital.

Nitin Aggarwal, vice-president, research-banking sector, institutional equities, Motilal Oswal Financial Services, said, “Growth in credit card spending in the past few months signals economic revival. Card acquisition rates have picked up, bolstering spending power.”

Apart from online spending, physical spending, too, returned this festival season. This trend may persist, given an under-penetrated credit card market and digital spending seeing growth spurt. Card acquisition should also see double-digit growth, with HDFC Bank back in the market, ICICI Bank and SBI Cards maintaining healthy growth,” added Aggarwal.

Shyam Srinivasan, managing director, and chief executive officer, Federal Bank, said, “Retail loans are growing and so are credit card spending. It is a steady rise, not a wild pattern. The bank will grow the credit card portfolio in a calibrated manner.”