Rise in delinquencies: Banks buckle up, go slow on issuing new credit cards
Reserve Bank of India (RBI) data showed that the pace of new card additions slowed to 620,000 in September from 920,000 in August, a fall of nearly a third.
New card issuances have fallen by more than 64% from the year earlier. The latest additions take the total credit cards in force to 106 million. Experts say that new card additions will slow further as lenders become wary of the unsecured segment.
“New cards issuance was majorly led by HDFC Bank and SBI Cards. However, net new card additions are expected to slow down in the near term due to rising delinquencies in the credit card receivables,” said IDBI Capital analyst Bunty Chawla. “Lenders also remain cautious on new cards disbursements due to the RBI’s risk weight norms.”
HDFC Bank added 430,000 cards in September, followed by SBI Cards (140,000) and Axis Bank (53,000). ICICI Bank’s sequential credit card addition was flat at 4,000 cards.
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