Credit cards seeing slower issuance and higher delinquencies: CRIF report

MUMBAI: India’s credit card market is slowing, with new issuances dropping and delinquency rates climbing, said the latest CreditScape report by CRIF High Mark. The report highlighted shifting dynamics between top card issuers (TCI) and medium card issuers (MCI) and changes in consumer borrowing patterns.

Top issues, which accounts for 70.2% of the total portfolio and 74.5% of active credit cards, continue to dominate the market. MCI hold 17.9% of the balance portfolio. Credit card balances grew 26.5% year-over-year (YoY) to Rs 3.3 lakh crore by Jun 2024, down from the 32.5% growth recorded a year earlier.

The number of cards in circulation rose 13.5% YoY to 10.1 crore, slower than last year’s 18.7% growth. The average balance per card grew 11.6% YoY to Rs 32,233, indicating increased consumer borrowing.

Delinquency rates rose across all categories. The 91-180 days past due (DPD) rate increased to 2.3% from 2.2% in Jun 2023. Cards with limits under Rs 50,000 showed the highest risk, with a 31-90 day DPD rate of 3.2%, up from 2.5% in Jun 2022. Severe delinquencies for MCI worsened, with the 360+ day DPD rate rising from 1.5% in Jun 2022 to 3.8% in Jun 2024.

New card issuances declined sharply, with Q1 FY25 seeing a 34.4% drop to 4.4 million, down from 6.7 million in Q1 FY24. This contributed to a 4.7% growth of new cards in FY24 compared to FY23. While top issuers share in new originations fell to 65.2%, medium issuer’s share rose to 29.7% in Q1 FY25, up from 22.2% in FY22.

Both top and medium card issuers improved sourcing quality across limits and regions. Medium issuers focused on top-tier cities, increasing new issuances in these areas from 43.2% in Q1 FY24 to 48.7% in Q1 FY25. TCI maintained stronger penetration outside urban centers. High-limit cards are gaining traction, with cards exceeding Rs 1 lakh comprising 31% of TCI’s new issuances and 37% of MCI’s in Q1 FY25.


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