Due to a change in the RBI’s regulation that needed lenders to deactivate cards that have not been in use for a year, the total number of credit cards declined by 22.6 lakh on a net basis in August 2022 to 7.8 crore from over 8 crore in the previous month. The industry also witnessed a month-on-month decline in total spending in August-down 3% from July, while the drop in numbers could be attributed to the RBI’s principles.
The chief of financial research at Macquarie Capital, Suresh Ganapathy said, “This is largely on account of implementation of new RBI policies. This should influence other players like SBI Card and ICICI Bank as well with a lag.” As per RBI’s statements, total credit card spending in shops stood at Rs 44,943 crore in August as compared to Rs 41,766 crore in July.
As a matter of fact, card spending online fell to Rs 67,414 crore in August compared to Rs 74,089 crore in the previous month. It is said that the new policies requiring deactivation of 365-day inactive cards distort the market share picture as various players implement this with a lag. Hence, we would not have a clear picture on market shares in the interim.
Nearly 3 lakh cards were added by SBI card on a net basis in the month of August and it is higher than industry growth. SBI card has highlighted before that 90-95% of its cards are 365-day active, and so the impact of the implementation of the new RBI norms should be limited to 5-7% of cards.This should reflect in its reported cards outstanding over the following couple of months.