Key Points
Credit card spending hits Rs 1.84 lakh cr in January
HDFC Bank increases market share to 21.5%
Transaction volume grows 31% year-on-year
RBI lifts Kotak Mahindra Bank's credit card embargo
The total credit card transaction volume in January 2025 stood at 430 million, reflecting a 31 per cent year-on-year growth, despite a 1 per cent month-on-month (MoM) decline due to the high base of December 2024.
The slowdown in transaction volume is attributed to increased caution driven by rising delinquencies, according to the report by Asit C Mehta Investment Interrmediates Ltd.
"Although the credit card data saw a moderation at an industry level in terms of new card dispatches, card spendings and transaction per card but the leading banks such as HDFC and SBI saw higher card dispatches and consequently leading to market share gain," said Akshay Tiwari, AVP-Equity Research Analyst.
The number of outstanding credit cards stood at 109 million, declining by 1.2 million cards from December 2024. The average spending per card decreased slightly by 1 per cent (on-month) to Rs 16,911, though it registered a marginal 1 per cent YoY increase.
The average spend per transaction was Rs 4,282, showing a 15 per cent YoY decrease, reflecting evolving consumer behaviour and macroeconomic conditions.
Leading banks continued to strengthen their presence in the credit card segment. HDFC Bank increased its market share from 20.2 per cent to 21.5 per cent over the past year through aggressive customer acquisition strategies.
SBI recovered from a dip in market share to 18.8 per cent, adding 240,000 new cards in January alone. ICICI Bank improved its share from 16.3 per cent to 16.6 per cent, showed the report.
A key highlight of the month was the Reserve Bank of India (RBI) lifting its 10-month embargo on Kotak Mahindra Bank's credit card issuance in February 2025.
This move allows Kotak to re-enter the market, potentially reshaping the competitive landscape in the coming months. Kotak's market share currently stands at 4.6 per cent, reflecting the impact of the previous restriction.
Despite short-term fluctuations in transaction volume and spending, the credit card industry continues to exhibit strong long-term growth.
