Credit Card Defaults Jump 28% to Over ₹6,700 Crore in 2024, Shows RBI Data

Credit card defaults in India have increased sharply in 2024. According to the latest data from the Reserve Bank of India (RBI), non-performing assets (NPAs) in the credit card segment rose 28.42% year-on-year, touching ₹6,742 crore as of December 2024. This is a rise of nearly ₹1,500 crore from ₹5,250 crore in December 2023.

Credit Card Loans and Defaults

The gross credit card loans outstanding stood at ₹2.92 lakh crore in December 2024. NPAs accounted for 2.3% of this amount, up from 2.06% of ₹2.53 lakh crore in the previous year. The rise in NPAs has occurred alongside an increase in credit card usage, with total credit card transactions reaching ₹18.31 lakh crore in FY24 – up from ₹6.3 lakh crore in FY21.

Fivefold Increase Since 2020

Credit card NPAs have grown more than five times since December 2020, when the total stood at ₹1,108 crore. This growth contrasts with the trend in the broader banking sector, where gross NPAs fell from ₹5 lakh crore in December 2023 to ₹4.55 lakh crore in December 2024.

RBI’s Response 

In November 2023, the RBI increased the risk weight on credit card receivables by 25 percentage points, raising it to 150%. This measure is meant to contain risks related to unsecured consumer lending. Risk weight determines how much capital banks must set aside against their loans. According to RBI data, credit card receivables stood at ₹2.92 lakh crore.

What Classifies as a Credit Card NPA

If a cardholder fails to make the minimum payment for 90 days, the dues are classified as an NPA. These dues often carry interest rates of 42 – 46% per annum, leading to higher liabilities for consumers and risk for banks.

Conclusion

The rise in credit card defaults brings out growing stress in unsecured lending. While overall bank NPAs have declined, the surge in credit card NPAs points to repayment challenges in a high-interest, high-usage environment.

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