MUMBAI: Credit cards, often seen as an accurate proxy for urban consumption demand in India, saw additions to both the customer base and spending in July, reflecting what some analysts described as revival in risk appetite by mainstream lenders.
Expenditures climbed 5.5% from June to Rs 1.93 lakh crore, which was a third higher than in July last year, the Reserve Bank of India (RBI) data showed. Net new card additions in July hit a five-month high at 425,000, taking the total tally to 111.6 million. The industry had reported a marginal contraction of 235 cards in June.
"Bank commentaries suggest that incremental delinquencies have plateaued," said Nitin Aggarwal, head of BFSI at Motilal Oswal Securities. "We expect top private banks to start showing improved traction in unsecured loans over the coming quarters."
HDFC Bank, the country's most valued lender, drove growth, adding 315,000 cards in July and expanding its total base to 24.8 million. SBI Cards, the second-largest player, slowed its pace further with just 66,640 net additions, taking its total to 21.2 million.
ICICI Bank, which had seen a sharp decline of over 287,000 cards in June, recovered with 67,664 additions in July, bringing its base to 18 million. Axis Bank, which also reported a decline in June, added 122,000 new cards. Kotak Mahindra Bank, after a sharp drop of 286,000 cards in June, managed a modest increase of 1,759 cards in July.
"Risk-based pricing is now well embedded in product underwriting, and gradual improvement in margins and credit cost trajectory will further support profitability," Aggarwal said.
Growth Moderation
Unsecured retail segments, such as credit cards, had posted a 25% CAGR between FY21 and FY24. However, credit card growth slowed sharply to 8.5% year-on-year as of May 2025, weighed down by rising stress and moderating demand.
Among mid-sized lenders, IDFC First Bank added 86,441 new cards and Federal Bank added 84,538. RBL Bank, however, continued to see a decline, with its card base shrinking by over 41,000 in July. The bank has consistently lost ground since it stopped sourcing new cards through Bajaj Finance in November last year.
"We have been consciously growing this (credit card) portfolio slower," Jaideep Iyer, head of strategy, RBL Bank, had said after the June-quarter earnings announcement in July.
"It is important that we continue to put a high threshold for new origination, both from an asset quality as well as a cross-sell perspective, to ensure this becomes a meaningful customer acquisition tool for the bank rather than just a credit card acquisition tool," Iyer had said then.
Expenditures climbed 5.5% from June to Rs 1.93 lakh crore, which was a third higher than in July last year, the Reserve Bank of India (RBI) data showed. Net new card additions in July hit a five-month high at 425,000, taking the total tally to 111.6 million. The industry had reported a marginal contraction of 235 cards in June.
"Bank commentaries suggest that incremental delinquencies have plateaued," said Nitin Aggarwal, head of BFSI at Motilal Oswal Securities. "We expect top private banks to start showing improved traction in unsecured loans over the coming quarters."
HDFC Bank, the country's most valued lender, drove growth, adding 315,000 cards in July and expanding its total base to 24.8 million. SBI Cards, the second-largest player, slowed its pace further with just 66,640 net additions, taking its total to 21.2 million.
ICICI Bank, which had seen a sharp decline of over 287,000 cards in June, recovered with 67,664 additions in July, bringing its base to 18 million. Axis Bank, which also reported a decline in June, added 122,000 new cards. Kotak Mahindra Bank, after a sharp drop of 286,000 cards in June, managed a modest increase of 1,759 cards in July.
"Risk-based pricing is now well embedded in product underwriting, and gradual improvement in margins and credit cost trajectory will further support profitability," Aggarwal said.
Growth Moderation
Unsecured retail segments, such as credit cards, had posted a 25% CAGR between FY21 and FY24. However, credit card growth slowed sharply to 8.5% year-on-year as of May 2025, weighed down by rising stress and moderating demand.
Among mid-sized lenders, IDFC First Bank added 86,441 new cards and Federal Bank added 84,538. RBL Bank, however, continued to see a decline, with its card base shrinking by over 41,000 in July. The bank has consistently lost ground since it stopped sourcing new cards through Bajaj Finance in November last year.
"We have been consciously growing this (credit card) portfolio slower," Jaideep Iyer, head of strategy, RBL Bank, had said after the June-quarter earnings announcement in July.
"It is important that we continue to put a high threshold for new origination, both from an asset quality as well as a cross-sell perspective, to ensure this becomes a meaningful customer acquisition tool for the bank rather than just a credit card acquisition tool," Iyer had said then.
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