Credit card spending within the nation rose to Rs 1.78 lakh crore in October, newest knowledge from the Reserve Bank of India confirmed. Analysts have attributed this to the continued festive season and a low base.

“Higher growth was aided by the festive season, discounts offered by companies, and the e-commerce companies’ sale campaigns,” HSBC Global Research mentioned in a notice on Thursday.

Total cards-in-force throughout the month stood at 9.5 crore, which is 1.8% larger than the earlier month, RBI knowledge confirmed.

While HDFC Bank Ltd. and ICICI Bank Ltd. accounted for 42% of internet playing cards issued, the share of market spends by HDFC Bank fell in October. “…such loss in share may be temporary and we await a recovery in their market share when spending patterns normalise,” HSBC Global Research mentioned.

However, smaller banks equivalent to AU Small Finance Bank Ltd., Union Bank of India, Catholic Syrian Bank, The Federal Bank Ltd. and The South Indian Bank Ltd. are regularly gaining market share.

Analysts consider that extra variety of acceptance factors, enhance in energetic playing cards and UPI-linked utilization on bank cards will propel card spending.

Though the current RBI norms on threat weights would impression the economics of bank cards, analysts don’t see any slowdown of their issuances.

The Reserve Bank of India on Nov. 16 raised threat weights on shopper credit score by banks and NBFCs to 125% from 100% earlier.

Further, bank card receivables for banks will entice a threat weight of 150%, whereas these by NBFCs will entice a threat weight of 125%, in comparison with earlier 125% and 100%, respectively.

This may result in a change in card economics, HSBC Global Research mentioned.

The worst-hit entity from the RBI’s current measure to curb unsecured lending can be SBI Cards and Payment Services Ltd, in line with BofA Securities. “In October, market spending through SBI Cards and Payment Services rose 42% month-on-month, to Rs 35,406 crore. But, its outstanding credit cards fell 1.1% month-on-month to 1.8 crore on account of inactive card cancellations and recalibration in new cards issuances in geographies with low delinquency,” the brokerage mentioned.

However, BofA Securities maintains a ‘purchase’ on SBI Cards and Payment Services because of sturdy observe report in market spends progress.

“As credit cards remain a vital tool for acquisition and customer engagement, we do not see card issuance slowing down anytime soon,” HSBC Global Research mentioned.