After the financial crisis in 2008, with rising defaults, banks rushed to curtail their credit card businesses. For instance, ICICI Bank saw its outstanding cards fall from 27.55 million in 2008 to about 11.5 million by April 2010. But over the past two years, the numbers have begun to see an increase with the trend especially picking up over the last year. The total number of credit cards has increased to 18 million with a commensurate increase in total transaction amount. From about Rs 60,000 crore in 2008, credit card transactions are closer to Rs 1 lakh crore mark a year. Private players HDFC Bank and ICICI Bank hold about 50% of the market at present. Among the two, HDFC has issued cards aggressively at about 75,000 cards a month, while ICICI is still cautious. What is different this time around is the changing stance of PSU players such as SBI, PNB and Corporation Bank who have been known for their conservative stance. SBI has undertaken a massive card expansion programme to increase its market share. It has an ambitious target of adding 50,000 cards a month to its portfolio. But the big trend that is emerging is the rapid growth outside of metros. And the country’s largest public sector bank has already taken the cue — it now wants to take the lead in tier 2 and 3 cities, ahead of private banks.
