Due to festivals, spending on credit cards has increased. There has been a spectacular increase of 25 percent in spending through credit cards in September. This is the fastest increase in the last 6 months. For the first time in February 2024, the increase in spending was more than 20 percent. According to the latest data from the Reserve Bank of India (RBI), the expenditure in the month of September was Rs 1.76 lakh crore, which was Rs 1.42 lakh crore in the same period a year ago. In August 2024, Rs 1.68 lakh crore was spent through credit cards.
Experts say that strong growth has been recorded due to the base effect and festival demand. Saurabh Bhalerao, Head of BFSI Research at CareAge Ratings, said, “The increase in spending through credit cards is due to the low base of the same period last year and increased spending during the festival. Also, there has been an impact of incentive schemes like EMI during the festive season. Due to the festival and all the incentive schemes related to it, spending is likely to remain good in October as well.”
Reserve Bank Governor Shaktikanta Das recently said that the festive season demand is giving mixed signals for India’s economic growth, but positive signals outweigh the negative indicators and India’s economy is performing better. Some private sector banks have seen increased pressure on credit cards as well as microfinance during July-September.
Arjun Chaudhary, Group Executive (Affluent Banking, NRI, Cards/Payments and Retail Lending), Axis Bank, said after the announcement of the results, “As we had mentioned last time, there are some segments in the case of credit cards where there are signs of initial stress and loans. We have taken action in this regard.”
