Demand for new credit cards has fully recovered and monthly applications in October have exceeded levels in the same month of the previous year, writes The Times of India. According to credit information company TransUnion Cibil, last month saw inquiries that were 106% of the queries in October 2019. Most of the demand is coming from small towns and non-metros, with metros yet to register growth over the previous year.
Each time a bank processes a credit card application, it raises a query with TU Cibil. These queries had dropped to 5% of the previous year’s level in April this year on account of the lockdown. A few months later in July, the numbers picked up but were still 61% of total inquiries in July 2019.
According to RBI data, there were 5.9 crore credit cards outstanding as of September 2020, up from 5.8 crore in March. In April, the number of outstanding credit cards had dipped to 5.7 crore as they were not getting replaced because of the lockdown. The RBI data also shows that SBI Card issued 4.6 lakh cards in the first half of FY21, while in the private sector HDFC Bank and ICICI Bank issued 4.8 lakh and 1.6 lakh during the same period.
Credit card origination volumes have also started picking up gradually as demand has resumed. Credit card origination volumes for July this year were at 37% of July 2019 levels. This decline is not as sharp as the one seen some months before amid the lockdown in April, where origination volumes slipped to 9% of April 2019 levels.