Credit card issuances rise for the third month

http://www.business-standard.com/india/news/credit-card-issuances-rise-for-third-month/480194/

Credit card issuance has grown for a third month, as banks have started expanding the business aggressively.

According to the latest data released by the Reserve Bank of India (RBI), the number of credit cards in the country increased by 128,000 in May. HDFC Bank added the most number of cards in May (69,974). State Bank of India (SBI) was next with 34,183 cards. SBI sells credit cards through SBI Cards, its joint venture with GE Capital. However, ICICI Bank and HSBC have reduced their credit card portfolios by 11,029 and 11,024, respectively.

The number of issued cards at the end of May was 17.9 million, the highest since March 2011, RBI data showed. Total transaction via credit cards in May was Rs 9,307 crore, a decline from the previous month’s Rs 10,119 crore.

The credit card base was at its peak at the end of March 2008, when the number was 27.6 million. However, following the global financial crisis and rise in delinquency rates, the base has been shrinking month-on-month till February 2012. Large players such as ICICI Bank and HSBC refrained from unsecured lending to improve their credit quality.

SBI, the largest commercial bank in the country, has sketched aggressive expansion plans for its cards business. At the end of April, the bank had a card base of 2.25 million. It plans to source one million cards annually in the next couple of years.

Among private banks, HDFC Bank, the largest credit card player in the country, has been the most aggressive. The bank, which has a base of 5.7 million credit cards, has announced a slew of initiatives in this space, including the launch of Infinia, a no-limit card.