Credit cards are slowly becoming a part of people’s daily routine. The use of credit cards has increased rapidly in India in recent years. Crores of people have started using credit cards indiscriminately for general purchases and many other things. Due to this, the banks are getting benefited, as well as the credit card dues are also skyrocketing.
20 lakh cards came in the market in two months
A recent report by the Reserve Bank states that in the month of May, credit card spending increased to Rs 1.4 lakh crore. At the same time, the number of credit cards in use increased to a record 8.74 crore in May. Out of these, the use of 50 lakh new cards started in the five months from January to May. Only during the months of April and May, about 20 lakh new credit cards were used.
This is how the number of credit cards increased
According to the data, where there were 8.24 crore active credit cards in the country in January 2023, their number increased to 8.33 crore in February, 8.53 crore in March and 8.65 crore in April. With the rise in numbers, the average credit card spend has also increased and is now at a new high of Rs 16,144.
HDFC Bank is at the forefront
At present, HDFC Bank of the private sector is in the first place in terms of issuing credit cards. Till May, 1.81 crore credit cards of HDFC Bank were in use. HDFC Bank is also on the first position with a share of 28.5 per cent in the total credit card outstanding. As per the data till May, SBI Card got the second position with 1.71 crore active credit cards. After this, 1.46 crore cards of ICICI Bank and 1.24 crore credit cards of Axis Bank are in use.
Usage increased 4 times in 10 years
A recent Mint report paints a different picture from the Reserve Bank on credit card dues. The report claims that the total outstanding of Indian credit card holders had crossed Rs 2 lakh crore in April itself. According to the report, the number of credit cards in the country has increased 4 times in the last decade. The extent to which their use has increased can be gauged from the fact that now it has become the second most used means of UPI in transactions.
This is why the figures are alarming
These figures of arrears are shocking. Even though banks are looking at it as growth on one hand, but at the same time it can also prove to be a balance sheet spoiler. Credit cards are a kind of loans that are unsecured. Simply put, recovering credit card dues is a very difficult task for banks, because there is no guarantee in lieu of it.
more than the GDP of these countries
Now let’s look at another interesting figure to better understand this borrowing figure. Convert 2 lakh crore rupees to dollars according to the current rate, then it becomes about 25 billion dollars. According to the International Monetary Fund, at present the GDP size of about 80 countries in the world is less than $25 billion. These include countries like Iceland, Trinidad and Tobago, Bosnia and Herzegovina, Lebanon, Zambia, Yemen, Haiti. This means that the credit card users of India currently owe to banks is more than the entire economy of many countries.
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