India’s credit card industry just hit the brakes. For the first time since the Covid era, the total number of credit cards in circulation declined, as top banks pulled back on new issuances and tightened the reins on customer acquisition.
The Reserve Bank of India’s latest figures show a market slowdown that many lenders saw coming—but not everyone was ready for the sudden dip.
Credit Card Numbers Stagnate, Spending Slides
At the end of June 2025, India’s credit card base stood flat at 111.1 million, marking a net fall of 235 cards—a tiny number on paper, but symbolically huge. That’s because it’s the first time in over four years that the industry has posted negative growth.
Credit card spending was also down, falling to a four-month low of ₹1.83 lakh crore. While this was still about 5.7% higher than in June 2024 (₹1.73 lakh crore), the month-on-month decline is setting off quiet alarms inside boardrooms.
The message from banks? Quality over quantity. The era of mass distribution seems to be on pause.
ICICI and Kotak Take the Biggest Hit
Some of the largest private sector lenders saw the most notable pullbacks in card count. ICICI Bank lost 287,000 cards in June alone, bringing its active total down to 17.9 million. Kotak Mahindra Bank saw nearly the same drop, losing 286,000 cards.
It wasn’t a one-off either.
ICICI had already seen negative growth in May, dropping 31,000 cards that month. Sandeep Batra, Executive Director at ICICI Bank, noted during the Q1 earnings call, “We believe the quality of the book we’ve built is quite stable. But if we spot early signs of stress, we take action quickly.”
RBL Bank, meanwhile, lost 47,000 cards, partly due to its decision last November to end sourcing from Bajaj Finance.
Banks Say No to Risky Borrowers
Why the retreat?
According to Jaideep Iyer, Head of Strategy at RBL Bank, the shift is deliberate. “It’s important that we continue to put a high threshold for new origination,” he said, noting that the bank wants to make credit cards part of broader, more meaningful customer relationships—not just a product push.
Other analysts echo that view. Ashutosh Mishra, Head of Institutional Equities at Ashika Stock Broking, said, “Banks are being cautious. They’re looking for top-tier borrowers now, not just volume.”
Adding to the pruning, the RBI’s rule to deactivate unused credit cards after 365 days is now kicking in again. That’s thinning out card bases across the board.
A Mixed Bag: Who’s Still Growing?
Not everyone’s shrinking.
Some lenders continued to expand their credit card portfolios—though at a slower pace than before:
-
HDFC Bank added 212,000 cards in June (down from 274,000 in May)
-
SBI Cards gained 83,000 cards (down from 126,000 in May)
-
Federal Bank added more than 92,000 cards
-
IDFC First Bank added over 70,000
These banks have been consistent performers in recent months and are likely benefitting from a sharper focus on salaried urban customers and tech-led acquisition.
Here’s a quick look at credit card addition trends in June 2025:
| Bank | Cards Added in June 2025 | Cards Added in May 2025 |
|---|---|---|
| HDFC Bank | 212,000 | 274,000 |
| SBI Cards | 83,000 | 126,000 |
| Federal Bank | 92,000+ | Data not disclosed |
| IDFC First Bank | 70,000+ | Data not disclosed |
| ICICI Bank | -287,000 | -31,000 |
| Kotak Mahindra Bank | -286,000 | Data not disclosed |
| RBL Bank | -47,000 | Data not disclosed |
Why This Matters: Signs of Consumer Slowdown?
There’s a broader story hiding underneath all this.
After years of aggressive retail lending and card pushes, Indian banks may now be feeling the pinch. Rising delinquencies, a few high-profile defaults, and fears of unsecured loan stress have made issuers hit pause.
More importantly, consumer sentiment is softening.
Inflation has remained sticky in certain categories, and discretionary spending hasn’t bounced back the way it did post-pandemic. That shows up in card swipes, especially for travel, dining, and fashion—usually the key drivers of credit card usage.
A One-Month Blip or Start of a Trend?
Hard to say just yet. June’s dip might be seasonal, technical, or a mix of both. But industry insiders are treating it as a warning shot.
The bigger banks have been here before. After all, India’s credit card market went through a similar cool-off in early 2020 before roaring back. But this time, the recovery might not be as quick, especially with stricter regulations and an election-heavy macro environment.
For now, the name of the game is clear: less risk, more rigor.
