Indicating a spurt in economic activities, payments made through debit cards rose over 40 per cent to Rs 9,911 crore in the first five months of this financial year over the year-ago period.
With the global financial condition slowly stabilising, there are signs of the domestic economy recovering and growing at a faster pace now.
Data available with Reserve Bank shows debit card payments touched Rs 9,911 crore for the five months ended August, an over 40 per cent surge compared to the corresponding period a year ago.
In the comparable period, the same stood at Rs 7,017 crore.
“The rise in debit card payment is due to rise in economic activities. These are on expected lines, as there are signs of recovery,” said an economist with a leading bank on condition of anonymity.
On the other hand, credit card transactions in the country slumped by more than 12 per cent in the first five months of this financial year to Rs 24,427 crore as shoppers decided against using their cards amid the ongoing economic slowdown.
The amount involved in such transactions last financial year till August was Rs 27,834 crore but started declining towards the end of the last financial year to manage Rs 65,355 crore in the complete financial year.
The credit card business has been on a decline since November last year. US financial services firm Lehman Brothers collapsed in September last year, sending shock waves across the world, with India’s economy being impacted.
Analysts say it is surprising that credit card payment is going down, as retail credit disbursal has increased. However, some banks have reduced credit limits and this might have hampered the business.
“The credit card payments decline indicates that people could be averse to taking credit,” said an economist.
