Credit Card Growth Slows in June 2025 as New Additions Decline at Major Banks

India’s credit card sector witnessed a marked slowdown in June 2025 as new card issuances declined significantly. For the first time since the Covid-19 outbreak, overall industry growth turned negative, indicating that banks are now prioritising quality over expansion.

Top Banks Report Significant Drop in Credit Card Numbers

June 2025 marked a challenging period for major credit card issuers. ICICI Bank’s active cards dropped by approximately 287,000, reducing its total to 17.9 million. Similarly, Kotak Mahindra Bank lost 286,000 cards, while RBL Bank and Axis Bank saw decreases of over 47,000 and 6,000, respectively. This shift is largely attributed to tightening credit norms and risk aversion amid asset quality concerns.

Credit Card Spend Also Sees a Decline

Credit card spending in June 2025 fell to a 4-month low of ₹1.83 lakh crore, a negligible rise from ₹1.73 lakh crore in June 2024. Despite year-on-year spending growth of just over 5%, the contraction month-on-month underscores a cautious consumer environment and banks’ focus on prudent customer acquisition.

New Issuance Trends at Other Banks

While most top players saw declines, HDFC Bank and SBI Cards still managed to grow, albeit at a slower pace. HDFC Bank added 212,000 cards, down from 274,000 in May, while SBI Cards added 83,000, compared to 126,000 earlier. Federal Bank and IDFC First Bank showed consistent upward movement, with additions of over 92,000 and 70,000 cards respectively in June.

Read More: Loan Defaults in India Rise to 3.6% in FY25, Credit Card NPAs Jump 28%!

Asset Quality and Regulatory Influences

The overall credit card base remained steady at 111.1 million, with net new issuances falling by 235 in June 2025. Banks have become more selective, aiming to limit future delinquencies. Moreover, the Reserve Bank of India’s regulation mandating the deactivation of cards unused for 365 days added additional downward pressure to card volumes.

Conclusion

The Indian credit card market saw its first negative growth since Covid-19, driven by banks’ cautious lending strategies and regulatory factors. While some lenders like Federal and IDFC First Bank continued to expand, the broader trend showed a clear pivot towards maintaining portfolio quality over aggressive expansion.

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