Swipe fest credit card spends top Rs 21 lakh crore on consumer demand
Credit card spending
in India surged over 15% in FY25 to a record ₹21.16 lakh crore, up from ₹18.32 lakh crore in the previous fiscal, according to data from the
Reserve Bank of India
(RBI).
#Pahalgam Terrorist Attack
India pulled the plug on IWT when Pakistanis are fighting over water
What makes this India-Pakistan standoff more dangerous than past ones
The problem of Pakistan couldn't have come at a worse time for D-St
The sharp rise underscores robust
consumer demand
and the growing shift towards digital, credit-based transactions, especially among urban and digitally-savvy users.
March 2025 alone saw record monthly spends of ₹2.02 lakh crore, up from ₹1.64 lakh crore in March 2024, reflecting strong discretionary spending at the fiscal year-end. February figures stood at ₹1.68 lakh crore.
The number of credit cards in circulation also grew to 10.98 crore by March 2025, up from 10.18 crore a year earlier, indicating sustained confidence in the economy and a preference for credit-led consumption.
HDFC Bank
led net new issuances in March with 2.2 lakh cards, followed by
SBI Cards
at 1.6 lakh,
Axis Bank
at 1.3 lakh, and
ICICI Bank
at 97,799. Amid signs of easing stress in the unsecured lending space, lenders are cautiously optimistic.
"We are seeing stabilisation and improvement in the credit card portfolio and we will be building back acquisition," said Arjun Chowdhry, Group Executive, Axis Bank. "The growth will be brought back cautiously and in a calibrated manner. We are now looking at faster growth than we had because we have seen a stabilisation that will allow us to deliver on that growth."
In total, 5.7 lakh new cards were added during March, up from 4.4 lakh in February, though still below the 12-month average of 7.1 lakh. Some banks, however, saw a decline.
Kotak Mahindra Bank
, which had its RBI-imposed card issuance ban lifted in February 2025, reported a net decline of 1.19 lakh cards.
RBL Bank
also lost 35,000 cards following the end of its partnership with
Bajaj Finance
.
Analysts expect card spends to remain stable in FY26, driven by consumption momentum, though new card issuances may remain moderate. "Lenders are shifting focus to cross-selling and maintaining credit quality rather than chasing aggressive growth," said Bunty Chand, analyst at IDBI Capital.
The RBI, which began macroprudential tightening in late 2023 to temper the rise in unsecured lending, recently eased risk weights for NBFC and microfinance loans but retained tighter norms for unsecured loans, a sign that cautious growth will remain the sector's mantra in the near term.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
30 minutes ago
- Business Standard
RBI's revised QA norms to boost compliance, broaden microfinance reach
The Reserve Bank of India 's (RBI's) revised qualifying asset (QA) criteria will enhance compliance while empowering institutions to build a more balanced portfolio, the Microfinance Institutions Network (MFIN) said on Monday. On Friday, the regulator relaxed the qualifying asset requirement for non-banking financial company-microfinance institutions (NBFC-MFIs) to 60 per cent of total assets, down from 75 per cent earlier. This means MFIs must now maintain 60 per cent of their assets in microfinance loans, instead of the earlier 75 per cent. The decision will enable NBFC-MFIs to extend their reach to the 'missing middle' — through products designed for clients transitioning to micro, small and medium enterprises (MSMEs), micro-housing, and related sectors, MFIN said. It added that the move would strengthen the sector's long-term sustainability while keeping the core microfinance mission intact. In a press release, MFIN said: 'The revised 60 per cent qualifying asset requirement is expected to enhance compliance across NBFC-MFIs by addressing the systemic reasons behind earlier breaches, and empower institutions to build a more balanced portfolio.' Over the past three years, MFIN has actively engaged with the RBI, advocating for a more realistic and balanced QA threshold that aligns with the policy objective of keeping NBFC-MFIs focused on microfinance, while also reducing the incidence of regulatory breaches. 'This regulatory change demonstrates the responsiveness of the RBI to the genuine demands of the industry,' said Alok Misra, CEO and Director of MFIN. 'It will help NBFC-MFIs remain in regulatory compliance at all times, diversify to some extent, and yet retain focus on microfinance.' This significant policy update is expected to ease compliance challenges and allow NBFC-MFIs to better serve microfinance clients while managing portfolio risks. The QA norm was originally introduced in 2011 when the RBI created the NBFC-MFI category, setting the threshold at 'not less than 85 per cent of its net assets,' with 'net assets' defined as total assets excluding cash, bank balances, and money market instruments. In March 2022, the RBI revised this to 75 per cent of total assets to offer flexibility and promote innovation in meeting evolving credit needs. However, the change inadvertently tightened the framework, leading to frequent breaches of the norm.
The Hindu
38 minutes ago
- The Hindu
Farmers seek cancellation of CIBIL requirement for granting loans
Representatives of Tamil Nadu Farmers' Protection Association sought the cancellation of a recent circular on reviewing applicants' CIBIL credit report for loans issued by the State Registrar of Cooperative Societies and submitted a petition to Collector M.S. Sangeetha here on Monday. The Petitioners said that the circular mandated that all loans, including crop loans disbursed through cooperative societies under the Kisan Credit Card (KCC) scheme, should be granted only after reviewing the applicants' CIBIL credit report. C. Nethaji of the farmers' association argued that the move could severely impact small and marginal farmers who already face restricted access to institutional credit. He pointed out, 'While the Tamil Nadu government calculates paddy cultivation costs at ₹76,000 per acre, only ₹36,000 is currently offered as crop loans, pushing farmers to seek loans from traders and middlemen.' He contended that including cooperative society loans in the CIBIL database would disqualify many farmers from accessing future credit from nationalised banks. Highlighting Reserve Bank of India's 2017 KCC guidelines, the farmers noted that no provision mandated the use of CIBIL scores to determine eligibility. Citing a similar stance taken by the Maharashtra Chief Minister, who warned against rejecting farm loans based on credit scores, the petitioners urged the Tamil Nadu Chief Minister M.K. Stalin to revoke the circular in the interest of farmers. Madurai MP Su. Venkatesan opposing the circular asked why a cooperative society loan for farmers should be based on CIBIL, which was a private entity. 'These are moves targeted at the small and marginal farmers whose farming activities are mostly dependent on the miniscule loans from the banks,' he added.
Time of India
39 minutes ago
- Time of India
BM Finance Fundas: RBI cuts repo rate by 50 bps: What should FD investors do now?
Reserve Bank of India fixed deposit investors FD interest rate RBI The(RBI) has cut the repo rate for the third time this year by 50 basis points. With the latest cut, the repo rate now stands at 5.5%. The cut in the repo rate brings cheers for borrowers but bad news for. The banks have been cutting theas thestarted reducing the repo rate at the start of 2025. Along with the repo rate cut, the RBI has also cut the Cash Reserve Ratio (CRR) by 1%.The RBI has cut the repo rate by 25 bps each time in February and April 2025. Due to two successive rate cuts, banks have aggressively reduced FD interest with the reduction in fixed deposit interest rates, banks are also reducing the interest rates on savings bank accounts. 'Banks have already reduced interest rates on savings accounts to a floor rate of 2.70%,' said SBI in its RBI has cut the repo rate three times till now. According to the SBI research report, 'Transmission to deposit rates is expected to be strong in the coming quarters. 100 bps repo rate cuts are expected in FY26.'This is likely to happen if the CPI inflation remains below the medium-term target of 4%, supporting growth in fighting cyclical downturns, and if credit growth remains are limited options available to FD investors when the interest rates are falling in the economy. Here are the steps that they should take to minimise the loss and make the most of the current interest rates on fixed deposits are expected to fall in the upcoming months, however, it may take some time before it actually happens. There are many banks which are still offering FDs at attractive rates. Therefore, it is essential for FD investors to book FDs at current higher rates as soon as possible. Certain banks are still offering interest rates of 8% or higher for longer-term fixed as most of the highest interest rates currently available on FDs are being offered by Small Finance Banks so you should check the safety of your principal amount. If you book your FDs with any bank which is considered risky it will be better to book your FD in such a way that it is covered under Rs 5 lakh deposit insurance cover. Many major banks are currently offering interest rates of 7% or higher for longer-term fixed the interest rate cycle has reversed from rising interest rates to falling interest rates, it may take a while for the interest rate cycle to reach its bottom and make a turn around. While short term FDs will see quick reduction in interest rate, it may take a while for interest rate on medium to long term FDs to fall. So, if you do not have any short-term need, a strategy of locking FDs for medium to long term can be beneficial.
