Credit card spends in June, although down marginally month-on-month (MoM), remained above the Rs 1-trillion mark for the fourth consecutive month. In June, credit card spends topped Rs 1.09 trillion, down 4.34 per cent MoM, revealed the data released by the Reserve Bank of India (RBI). However, on a year-on-year basis, spends were up 73 per cent.
In May, credit card spends hit an all-time high, reaching Rs 1.14 trillion.
The surge in card addition was led by HDFC Bank, the largest card issuer in the country, Kotak Mahindra Bank, and Axis Bank.
HDFC Bank added 386,487 cards in June, followed by Kotak Mahindra Bank (262,942), Axis Bank (228,933), ICICI Bank (190,490), and SBI Card (166,976).
“Although down marginally MoM, credit card spends remain strong,” Macquarie Research said in a report.
“Axis Bank has seen a sharp rise in the spends market share for June, while SBI Card has seen a sharp decline. The SBI Card management had mentioned it has had issues in running targeted customer campaigns due to some technology and human resource issues at the parent bank, which affected its market share,” the report added.
“Industry spends growth is being driven by pick-up and commercial card spends,” Puneet Sharma, chief financial officer, Axis Bank, had said at a post-earnings analyst call.
Other large issuers, such as HDFC Bank and ICICI Bank, had mentioned in their post-earnings analyst calls that spends have gone up substantially because of improvement in discretionary spending.
HDFC Bank has the highest market share in credit card spends at 27.2 per cent, followed by ICICI Bank at 19.9 per cent, and SBI Card at 17.7 per cent. Axis Bank has a spends market share of 9.3 per cent as of June.
The pace of card additions has gone up significantly ever since the RBI allowed HDFC Bank to issue new credit cards in August last year. The bank faced an RBI ban on issuances of new cards for eight months, from December 2020.
“We remain concerned about the steady decline in the spends market share for Citibank over the past 12 months as this has implications for Axis Bank in our view,” Macquarie Research observed in its report.