Indian use of plastic money in strong surge

India’s fascination with plastic money seems to growing stronger by the day.

india Updated: Aug 15, 2011 22:56 IST
Sachin Kumar
Sachin Kumar
Hindustan Times

Spending through credit cards rose by 30% year-on-year to Rs22,128 crore during the April-June quarter of 2011-12 against Rs16,948 crore last year, according to data released by the Reserve Bank of India (RBI).

Spending through debit or ATM cards, increased by 45% year-on-year to Rs11,691 crore during the April-June quarter compared to Rs8,065 crore last year.

“It’s a natural progression for country like India, which is growing rapidly and more people availing banking facilities,” said Anand Selvakesari, country business manager, global consumer group, Citibank. “However, there is still much potential left as penetration of plastic money in India is less than countries such as the US and China.”

However, the total number of credit cards in the country witnessed a marginal fall as total outstanding credit cards at the end of June 2011 declined 6% to 1.8 crore from 1.9 crore at the end of June 2010. On the contrary, the number of debit cards rose 25% to 24.0 crore at the end of June 2011 compared to 19.0 crore at the end of June 2010.

“The growing number of point-of-sale terminals in the country have also helped in increasing payment through credit and debit cards,” said M Narendra, chairman, Indian Overseas Bank.

However, bankers are likely to be cautious in selecting their customers for credit cards due to the uncertainty in the global economy. “We will continue expanding our cards base in India, but will select customers cautiously,” said Selvakesari.

First Published: Aug 15, 2011 21:20 IST