India nears 11 crore credit cards; HDFC, SBI, ICICI lead the expansion race

In January, major Indian banks aggressively expanded their credit card portfolios, accounting for nearly 90% of all new cards issued, according to data from the Reserve Bank of India (RBI). HDFC Bank, SBI Cards, and ICICI Bank were the top issuers contributing to a year-on-year growth of 9.5% in the total number of credit cards in India, now standing at 10.89 crore, The Economic Times reported. 

The industry added 8.2 lakh new credit cards in January, led by HDFC Bank with 3 lakh cards, followed by SBI Cards (2.4 lakh) and ICICI Bank (1.8 lakh). 

Despite the surge in card issuance by major banks, smaller institutions remained cautious, issuing only 1 lakh new credit cards. This caution is attributed to rising delinquencies and the RBI’s stringent risk-weight regulations. 

Kotak Mahindra Bank reported a potential decline in risks associated with credit cards, anticipating further reductions in the coming quarters. 

In November 2023, in response to increased consumer lending, the RBI implemented macro-prudential tightening measures. While easing on NBFC and microfinance loans, the central bank maintained higher risk weights on unsecured loans. 

RBI data also revealed a 2.1% drop in credit card spending in January 2025, with total spending falling to ₹1.85 lakh crore from ₹1.89 lakh crore in December 2024. This comes after an 11.1% surge in spending in December, though January spending still marked a 10.6% increase from the previous year, reflecting robust credit card adoption despite temporary dips as seen by HDFC, Axis, and IndusInd banks. 

Among major banks HDFC Bank saw a 4.7% decline in credit card spending, while Axis  Bank recorded a 6.6% drop. IndusInd Bank experienced a 5.5% fall.

Meanwhile, a report by Phillip Capital projected that overall credit costs in the credit card segment are expected to peak in the next one to two quarters. “The performance of new cohorts is satisfactory and we expect overall credit costs to peak out in 1-2 quarters,” the report stated, indicating a continued strain due to high credit costs. 

Banks have already taken corrective measures following the regulator’s decision to increase risk weights on unsecured businesses aimed at controlling risks and enhancing financial stability. “Banks took corrective action a few quarters ago, when the regulator increased the risk weights on unsecured businesses,” the report continued, underscoring the proactive stance of banks in addressing potential risks.