Credit Card issuance declines in Q2FY26 amid slowing consumer credit growth: JM Financial

New Delhi [India], December 23 : India's credit card industry is witnessing a clear slowdown in growth, with new card issuance declining sharply even as private sector banks continue to consolidate their dominance, according to a recent report by JM Financial Institutional Securities.

The number of new credit cards issued fell to 4.4 million in the second quarter of FY26, a steep 28% year-on-year decline compared with 6.1 million cards issued in the same period last year, the report said.

As a result, growth in cards in circulation remained muted at 6% year-on-year, underscoring a broader moderation in consumer credit expansion.

Outstanding credit card balances also reflected this slowdown. Growth in balances eased to 9% year-on-year in 2QFY26, significantly lower than the 20% growth recorded in FY25, largely due to weaker card issuance trends.

Despite the overall deceleration, private banks strengthened their grip on the market. Nearly 78% of all new credit cards issued during the quarter came from private sector lenders, while NBFCs and other players continued to lose ground, the report highlighted.

Private banks' market share in new card issuance rose by about 730 basis points compared with FY25 levels.

Asset quality indicators presented a mixed picture. While late-stage delinquencies (PAR 90+) had surged to 15% in FY25, they moderated to 8.9% by 2QFY26. Early-stage delinquencies also showed improvement, though mid-stage delinquencies for private banks edged up during the same period.

In terms of spending, leading issuers continued to gain traction.

Citing the RBI data, the report said SBI Cards and HDFC Bank gained 172 basis points and 96 basis points, respectively, in market share of credit card spends in FY26 year-to-date. In contrast, players such as ICICI Bank, Kotak Mahindra Bank, RBL Bank and IndusInd Bank ceded market share.

In terms of key retail loan segments such as personal loans, home loans and auto loans, the report said Public sector banks (PSBs) are steadily gaining market share from private sector lenders, JM Financial said.

The report noted that PSBs have improved their position in terms of disbursement market share across both unsecured and secured lending segments, supported by higher average ticket sizes, improving asset quality and a gradual recovery in loan growth during the first half and second quarter of FY26.

It said that in terms of disbursements market share, PSB gained in personal, home and auto loans.

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