Growth in credit card industry in terms of acquisition of new customers is likely to be weak in the current financial year as most banks and card issuers are no longer looking at expanding their customer base in a reckless manner. Today, there are about 18 million credit card holders, down by a few thousands from what it was in 2009-10.
Kadambi Narahari, CEO, SBI Cards and Payment Services Pvt Ltd — joint venture between US conglomerate General Electric and the country’s largest lender, State Bank of India — told HT that banks want to be careful while issuing new cards and leverage CIBIL’s (Credit Information Bureau of India) distribution network to ensure that the customer has a clean track record in terms of financial discipline.
“The expansion in credit card industry has been moderate but banks and credit card issuers are now more focused on increasing the spending on the card,” Narahari said.
Narahari said that the default rate, which had breached the double digit figure has now come down to a manageable level. “While banks have stopped recklessly issuing cards, customers have also become aware and they do not want to be blacklisted by CIBIL. Therefore, several hundred card holders have shown an urge to clear dues, which has brought down the default rate in the industry,’ he said.
HDFC Bank, ICICI Bank, SBI Cards and Citibank are among the top card issuers with a combined market share of about 70% in the credit card industry.