Festive fervour: Credit card spends zoom 54% over last year

Festive fervour: Credit card spends zoom 54% over last year

Buoyed by the festive season credit card spends are signalling a revival of consumer spending. Indians spend a total of Rs 77,981 crore in August a rise of 54% over last year figures, latest RBI data showed. Spends on credit cards also rose 4% sequentially, when spending in July was recorded at Rs 75119 crore.

Before the pandemic hit in February last year, credit card spends were recorded at Rs 62,902 crore. Bankers are hopeful that spends will rise further in October and November.

“We are seeing a significant revival on ground, and shows that consumer spending is back, our range of festive offers on credit cards is not just about coming back with a bang but also about spurring India’s consumption story,” said Parag Rao, Group Head – Payments, Consumer Finance, Digital Banking, and IT, HDFC Bank.

HDFC Bank the market leader in this segment recorded spends of Rs 20,650 crore in August. It’s total cards stood at Rs 1.47 crore.

Banks have been aggressively pushing credit cards to customers and the Indian economy turns a corner and retail spends see uptick. Latest festive sale figures indicate that customers have been saving to spend during the festive season, with the most spends recorded on smartphones and other electronics & gadgets.

Peer private lender ICICI Bank also recorded a stellar August surpassing SBI cards in card spends. The lender had spends worth Rs 15,271 crore, posting steady rise in spends month on month. It had spends worth Rs 14,355 crore in July. The bank also added 2 lakh fresh cards in August taking its total tally to 1.14 crore cards.

SBI Cards also also growth in card addition and spends with total credit cards rising to 1.24 crore. It’s spends rose to Rs 14553 crore at the end of August against Rs 14,370 crore in July.

Axis Bank too recorded card spends at Rs 6848 crore while total cards rose to a little over 73 lakh.

Retail credit, despite relaxation in restrictions, was up mere 1.2% month on month after rising 2.6% month on month in July 2021. On a lower base, year-on-year growth improved traction to 12.1%.

“This was primarily led by gained traction in vehicle loans, personal loans and credit cards. Now with normalisation visible in most parts of the economy, we believe retail credit growth is likely to sustain above 10-12%,” said Kunal Shah of ICICI Securities. “The credit card segment experienced the quickest recovery as activity levels revived and similar trend was seen post covid second wave over the past two months.”

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