The use of credit cards to make transactions has been increasing since February, even as the number of outstanding cards has been falling since then.
According to data released by the Reserve Bank of India, the amount transacted through credit cards increased to Rs 7,880 crore in May from Rs 6,212 crore in February. But the number of outstanding cards dropped to 17.6 million from 18.1 million during the same period.
“Banks typically deactivate cards that are inactive for some time. Also, banks are not very aggressive to offer credit cards to all and sundry. Banks mostly prefer to offer credit card service to existing customers only,” said a senior official of a public sector bank.
| CARDS ON THE TABLE | ||||
| Credit cards | Debit cards | |||
| Number of outstanding cards | Amount | Number of outstanding cards | Amount | |
|
11-Feb | ||||
11-Mar
11-Apr
11-May
He emphasised that the trend in number of active cards was more important. “I don’t think that number has come down,” he said. After recession, banks had restricted the issuance of credit cards to new customers and were also not issuing cards to multiple card holders.
IndusInd Bank, which launched its credit card last month, aims to bring scale to the business. “We believe the credit card industry is ready now after 3-4 years of bloodbath and washout. It is at the take-off stage again. We are at the beginning of the revival of credit card business,” said Romesh Sobti, the bank’s managing director and CEO in a recent interview with Business Standard.
On the other hand, use of debit cards has been increasing along with the number of outstanding cards. In May, the amount transacted with debit cards increased to Rs 4,201 crore from Rs 3,304 crore in February. The number of outstanding debit cards rose to 234 million from 222 million during the same period.
