The number of active credit cards in the banking system has increased for a second month in a row and surpassed the pre-deactivation levels introduced in July.
The number of active credit cards has gone up 20% year-on-year to 806.65 lakh in November, data released by the Reserve Bank of India (RBI) showed. The number of active credit cards increased in the previous month as well.
The market leader in the credit card space, HDFC Bank, saw the number of active credit cards rising to 167.8 lakh in November from 165.46 lakh in October. State Bank of India added 389,000 cards in November. ICICI Bank, however, saw reduction of 106,000 cards during the month to 134.32 lakh cards.
The RBI had issued directions to banks to deactivate credit cards which were inactive for 365 days. Banks have started the process of deactivation after the guidelines became effective in July.
Despite an increase in the number, overall credit card spending declined 12.4% to Rs 1.15 trillion in November, compared with Rs 1.29 trillion a month ago. Transactions in volume terms fell 8% in November to 235.1 million. Per card spend stood at Rs 4,884, compared to Rs 5,050 in October, lower by 3.2%.
The volatility in credit card spending was perhaps on account of the festive season, Macquire Research said in a report. Going ahead, linking of Rupay cards with the UPI will be useful for tier II-IV cities as these cities lack the PoS infrastructure, SBI Card said in an analyst call.
