Indian consumers in February initiated 18.3 million credit card transactions, down 6.6% from 19.6 million during the same month last year. Credit card sales volume, however, increased by 6%, to 49.4 billion rupees (US$1.1 billion or 819.2 million euros) from 46.6 billion rupees, according to data from the Reserve Bank of India.
Indian financial institutions had issued 20.1 million credit cards as of end of February, down 21.1% from 25.5 million a year earlier, the central bank says.
The drop in credit card transaction volume is indicative Indian consumers’ resistance to credit, Mrinalini Manral, an analyst with Mumbai-based electronic payments research firm Dassler Business Intelligence, tells PaymentsSource. “Earlier, when the economy was booming between 2001 and 2008, the use of credit to fuel consumption was rising concurrently,” she says. “But the financial crisis shocked back Indian consumers to the traditional mantra of not taking credit.”
Manral believes the increase in credit card spending sales volume is temporary and should be evaluated over time. “I wish card-repayment figures were available, for that would give us a clearer picture,” she says. “In any case, the rate of growth of debit card use far outstrips credit card use and just reinforces what I said on the averseness to credit coming back.”
Debit card use in February increased 33.6 %, to 14.7 million transactions from 11 million a year ago, the central bank says. The value of those transactions increased 45.1%, to 22.2 billion rupees from 15.3 billion rupees. Indian financial institutions issued 178 million debit cards as of the end of February, up 32.8% from 134 million issued a year earlier.
