By Shashank Didmishe
Credit card spends in the banking system bounced back in May on a year-on-year basis after witnessing a contraction in April led by healthy improvement in transactions at the e-commerce and point-of-sales (PoS) terminals. Overall credit card spending grew by 8% month-on-month in May to Rs 1.14 trillion.
The credit card spending rose 118% on year while the number of transactions grew by 77% on year to 238 million, as per data released by the Reserve Bank of India (RBI).
Consumers spent Rs 714 billion on e-commerce platforms using credit cards in May. Credit card spends on e-commerce platforms rose 8% on year. On the other hand, credit card spends at PoS terminals improved 6% on year to Rs 422 billion. The share of credit card spending on e-commerce platforms improved 60 basis points in May while the share of spending at PoS terminals decreased.
The credit card transactions in April declined as it was a seasonally weak month for retail spending, analysts had said, adding that the yearly trends on spending are expected to remain strong. The rising share of e-commerce transactions in credit card transactions is expected to aid in maintaining the growth in card spends, analysts at a domestic brokerage said in a report today.
The total number of cards issued stands at 77 million as the banks issued 1.7 million credit cards in May. HDFC Bank has maintained its leadership position with the lender issuing 3.85 lakh credit cards during the month taking the total number of credit cards issued to 17.2 million. Other banks such as State Bank of India, ICICI Bank and Axis Bank too posted an increase in the number of cards issued in May. In contrast, private sector lender Kotak Mahindra Bank registered a decline in the total number of credit cards issued. In May, the bank issued 1.81 lakh cards as against 2.29 lakh cards issued in the previous month. Foreign banks including CitiBank, Bank of America and Standard Chartered Bank posted a decline in the number of cards issued during the month.