RBI warns against increasing unsecured bank credit, after credit card dues cross Rs 2 lakh crore
By Lokmat English Desk | Published: June 26, 2023 12:04 PM2023-06-26T12:04:58+5:302023-06-26T12:04:58+5:30
Next 
At nearly 30%, credit card fees have risen twice as fast as all bank loans in one year. For the first time, outstanding credit cards crossed the Rs 2-lakh-crore mark in April.
Lenders say there are no major concerns as the share of credit card fees remains low even though RBI has warned against increasing unsecured bank credit. According to RBI, credit card balances reached Rs 2,00,258 crore in April 2023, an increase of 29.7% from April 2022.
The increase in credit card dues is not just due to rising debt, but reflects their increased use for payments and inflation. “Credit card balance sheet growth follows the trend of increased consumer credit card spending. Over the past year, consumer spending has also increased,” said Sanjeev Moghe president and manager (cards and payments), Axis Bank. In April 2023, the total value for which credit cards were swiped or used online was slightly over Rs 1.3 lakh crore.
While the increase in credit card transactions is generally considered a measure of consumer confidence, the growth in outstanding balances may also be due to inflation, as people pay more for the same purchases.
In April 2023, credit card transactions were worth Rs 1.3 lakh crore. Increased credit card transactions means increasing consumer confidence. But rising arrears means people are paying more for the same purchase. But an increase in outstanding means that people
The share of card balance in total bank credit is 1.4 percent. It is highest among personal loans followed by housing (14.1 percent) and auto loans (3.7 percent). Credit card arrears peaked at 1.2 percent before the 2008 Global Financial Crisis. After this one
According to bankers, today's situation is slightly different from 2008. Now credit card is given only to those people who are able to repay the loan. Even after rising spending and multi-card ownership, India ranks among countries where credit card usage is low.
According to population estimates, less than five percent of people in India have a credit card. This number is less compared to other developing countries. According to the Reserve Bank of India, the sector's share in bank credit has declined from 26.3 per cent in the last 12 months
