For the first time since Feb 2010, the credit card base of the country has gone beyond the pre-crisis level, crossing the 20-million mark. As per the data from the Reserve Bank of India (RBI), credit cards reached 20.29 million at the end of December 2014.
According to bankers, boom in the e-commerce industry and overall improvement in the banking infrastructure has contributed to the growth and easy acceptance of credit cards. Moreover, this substantial rise in online shopping might as well have resulted in the increased number.
It cannot be denied that shopping through web and mobile apps have increased considerably, thereby ensuing in the rise in card usage in the digital arena. Additionally, there are a several banks these days which have associated with some websites that proffer extra discounts for the cards. This has assisted in spends of the card to shoot up. It is not just shopping but also actions such as recharge, bill payment, booking for movies and plays that have added to rise.
Apart from the number of cards in the system, spends too have risen noticeably, according to RBI data. The spends on credit cards were Rs 8,532.6 crore at the end of December 2011 and have grown to Rs 17,437.1 crore by the December 2014.
In contrast to the crisis period of 2008-09, year 2014 has witnessed the rise in the number of cards in the system. The good part is that the number of non-performing cards has been limited. Also, banks are taking into consideration the CIBIL score of consumers before dispensing the cards. This has allowed them to dole out credit cards only to those consumers who have repaying power.
The CEO of SBI Cards, Vijay Jasuja, is of the view that this increase in credit card base is sustainable, given that lenders are being aggressive and calculative regarding the risk they are taking. RBI has also been discouraging the use of cash in the economy, and promoting increased card usage, as this will lead to the growth. [Read: RBI Allows Transactions up to Rs 2,000 via Contactless Cards]