Credit cards: Sharp fall in delinquency level

With credit card users getting more mature, responsible and less impulsive on the one hand, and bankers too exercising enough caution while granting credit cards, delinquency levels have come down by over 50 per cent, said Mr Kadambi Narahari, CEO, SBI Cards.

According to him, delinquency levels used to be in the 8-9 per cent range during 2006-2008, this has now come down to 4 per cent. In fact, during the period of crisis (2008-09), it used to hover around 11-12 per cent, he said. For State Bank of India, “it's lower than the industry level.”

And, this is despite the credit card market growing at 12-15 per cent year-on-year.

However, he said, even the current delinquency level is marginally above the global average (of 2.5-3 per cent).

He attributes this healthy trend to “more disciplined and evolving” Indian consumers. The consumer knows what he wants and when to buy it. Almost 40-45 per cent of the credit-card users do not exercise the revolving option, he said, adding in a lighter vein, “though we would prefer them to”.

There are over 20 million credit cards issued so far, while the number of potential consumers out there is over 400 million, he added.

rravikumar@thehindu.co.in