But the card population witnesses 1.21 million casualties.
The credit card population in the country fell by 1.21 million to 22.8 million in June, the sharpest monthly fall since April 2008, according to data released by the Reserve Bank of India (RBI).
However, bankers were reassured by the fact that the average spending per card had gone up marginally. They were also hopeful that card spends would pick up further with the onset of the festival season.
“The sharp fall in the card population was due to some big players going slow on issuances,” said the retail head of a large foreign bank.
“Monthly spends in June have gone up for us and we expect them to go up further as the festival season approaches,” he said.
According to the RBI data, the average spend per card was higher in June 2009 at Rs 2,129.30 as against Rs 2,076.20 in June 2008. For May 2009, the average spending was Rs 2,002.10. “Our average spends in the premium segment are going up, while those in the regular segment are more or less static. We expect to see an increase in spends with the approach of the festival season,” said RL Prasad, head of credit cards at Standard Chartered Bank.
“One reassuring fact is that though the credit card base has reduced, card spends have not. This points to the fact that most of the cards that were weeded out were either inactive, or were cases where a single customer had multiple cards,” said the head of a large card issuer.
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Inactive cards cost banks money in terms of billing and postal charges.
Chances of misuse of such cards were also high as the card-holder could use it to get over any financial trouble without having to put up any collateral.
Apart from whittling down their existing card base, some of the most aggressive players have also slowed new issuances.
For instance, ICICI Bank, which has the largest credit card base in the country, has slashed the number of new credit cards to about 1,000 a month, according to a senior executive, who declined to be named.