Credit Card Industry Growth Slows in June 2025, New Additions Decline at Top Banks

India's credit card industry growth slows in June 2025, with new card additions dropping at top banks. Overall industry growth slipped into negative territory for the first time since the Covid-19 pandemic. Credit card spends were down to a four-month low of ₹1.83 lakh crore, with a 5% growth over June 2024. ICICI Bank, Kotak Mahindra Bank, RBL Bank, and Axis Bank saw significant drops in their new card additions. Analysts attribute the slowdown to banks scouting for high-quality customers to arrest future delinquency issues.

India's credit card industry experienced a significant slowdown in June 2025, with new card additions declining at major banks. According to data released by the Reserve Bank of India (RBI), the overall industry growth turned negative for the first time since the onset of the Covid-19 pandemic [1]. Credit card spends also decreased to a four-month low of ₹1.83 lakh crore, registering a 5% growth over June 2024.

Among the leading credit card issuers, ICICI Bank, Kotak Mahindra Bank, RBL Bank, and Axis Bank saw substantial drops in their new card additions. ICICI Bank's total cards in use dropped by about 287,000 over May to 17.9 million at June end [2]. Kotak Mahindra Bank also experienced a sharp drop of 286,000 cards, while RBL Bank lost over 47,000 cards and Axis Bank saw a decline of around 6,000.

Analysts attribute the slowdown to banks focusing on high-quality customers to mitigate future delinquency issues. "Banks are cautiously growing their book and targeting only high-quality customers, hence we are seeing a slowdown," said Ashutosh Mishra, head, institutional equities research at Ashika Stock Brokin [2]. Additionally, the RBI's rule on deactivating unused cards after 365 days may have contributed to the decline in card numbers.

In contrast, HDFC Bank and SBI Cards reported increases in their card bases. HDFC Bank added 212,000 cards and SBI Cards 83,000 cards, although the pace of additions slowed compared to previous months [2]. Federal Bank and IDFC First Bank also continued to add new cards, with Federal Bank adding more than 92,000 cards and IDFC First Bank adding more than 70,000 cards in June.

Total net new card issuance fell by 235 last month, with the total credit card base remaining flat at 111.1 million [2]. This trend indicates a cautious approach by lenders in the face of potential risks and a shift towards more stringent underwriting standards.

References:
[1] https://www.business-standard.com/finance/news/credit-card-in-force-stays-flat-in-june-2025-125072201440_1.html
[2] https://m.economictimes.com/industry/banking/finance/banking/credit-card-growth-slows-in-june-2025-new-additions-drop-at-top-banks/articleshow/122844464.cms