Foreign Banks' Credit Card Base Shrinks Amid Shift to Domestic Lenders

The combined credit card base of foreign majors in India has declined for the first time in years. American Express, HSBC India, Standard Chartered Bank, DBS Bank India, and SBM Bank India saw their collective base fall by 7.1% on-year to 3.99 million as of June. This is a significant drop compared to the industry's overall growth of 9.6% to 121.6 million cards.

The five foreign banks collectively lost 304,000 cards in this period, which resulted in their share of cards outstanding falling by about 59 basis points to 3.29%, from 3.88% a year earlier. Standard Chartered and DBS Bank India recorded the sharpest contractions, with Standard Chartered's card base falling 28% to 581,000.

Saurabh Bhalerao of CareEdge Ratings attributed this decline to foreign banks' focus on profitability and premium customer segments over expanding card volumes. Prakash Agarwal from Geofin Capital believes that domestic lenders are gaining market share due to their larger retail customer bases and wider distribution networks.