Despite the stress, big banks keep playing credit cards

Mumbai: Continued stress in the credit card segment has prompted caution among several large and mid-sized lenders. Kotak Mahindra Bank, RBL Bank and IndusInd Bank have slowed new credit card issuances, according to the Reserve Bank of India data. This contrasts with the approach taken by larger peers such as HDFC Bank, ICICI Bank and Axis Bank, which have continued to aggressively expand their credit card portfolios.

An ET analysis showed that in October, Kotak Mahindra Bank saw a net addition of 765 cards, while RBL Bank saw a steep decline of about 18,211 cards. IndusInd Bank also reported a contraction, with its card base shrinking by more than 1,228 cards.

Meanwhile, major issuers continued to scale up. HDFC Bank added about 1,44,000 lakh cards in October, SBI Card added about 1,27,000, ICICI Bank added about 1,04,000 and Axis Bank’s credit card base expanded by 79,842 cards.

“Banks are turning cautious because they are cleaning up their books, and it’s not easy to acquire top-quality customers without offering very lucrative deals and incentives,” said Prakash Agarwal, partner at Gefion Capital.

The slowdown for the mid-sized banks is not new. In September, Kotak’s card base fell by 34,776, while IndusInd recorded a drop of 6,734 cards. RBL Bank saw the sharpest decline, losing 72,726 cards during the month.

In August, Kotak Mahindra Bank remained in positive territory with a net addition of 6,754 cards, but IndusInd Bank and RBL Bank continued to see losses, with declines of 5,703 and 1,05,727 cards, respectively.New credit card originations have fallen 42% over eight quarters to 4.4 million in the second quarter of 2025-26 from 7.6 million two years earlier, according to CRIF data, highlighting a calibrated slowdown in acquisition.

“New cards issued remained metro-centric, with private banks consolidating their share as they target higher-value customers,” CRIF said in the report. “Asset quality pressures persist, with portfolio-at-risk in the 31-180-day bucket at 4.1%. New-to-credit share has remained stable, pointing to a maturing customer base. The overall trend signals a strategic shift toward driving higher spends from existing customers while pursuing measured growth amid elevated delinquency concerns.”