New Delhi : The number of active credit cards in India has dropped by almost 35 percent in the last three years as banks withdrew cards from defaulters and became cautious in issuing new ones, an industry survey revealed.
The number of active credit cards in India has steadily dropped from a peak of 2.75 crore as on March 2008 to 1.85 crore in March 2010. Since then it has further declined to 1.80 crore as on March 2011, according to a survey conducted by Atos Worldline, a firm that specialise in electronic payment services.
“The decline is due to clean-up of the credit card portfolio by banks,” Sameer Nemavarkar, CEO of Atos Worldline India, said in the survey report.
Some major players in the credit card industry like ICICI Bank, Citibank and Standard Chartered have reduced the number of cards and are cautious in issuing new cards.
However, some banks like HDFC Bank and Kotak Mahindra Bank are aggressive and are issuing credit cards to new customers at a faster rate, the report said.
“The growth in issuance of credit cards by banks is likely to be subdued in the next few years due to prevailing high interest rates and concern for bad debts and recovery,” the report said.
Although there is drop in card numbers, overall spending through credit cards have increased over the last few years.
Average annual spending through per credit card increased to Rs.41,862 in 2010-11 as compared to Rs.33,335 in the previous year, registering a growth of almost 25 percent year-on-year.
Banks are shifting their focus from mass marketing and catering to their own premium segments. “With most banks in consolidation phase, it is estimated that the financial year 2011-12 may see a marginal rise in the credit card base or it may remain constant.”
HDFC Bank is the leader in credit card business in India, with almost 28 percent market share. It is followed by ICICI Bank, with 22 percent market share and State Bank of India with 13 percent share.
Four top players — HDFC Bank, ICICI Bank, SBI and Citibank – control almost 71 percent of the credit card market in India.
IANS
