New Delhi:

The number of credit cards has more than doubled to around 10.80 crore at the end of December 2024, compared to December 2019 when there were 5.53 crore cards in circulation, according to a new RBI report.

In contrast, number of debit cards have remained relatively stable, with a marginal increase from 80.53 crore in December 2019 to slightly more than 99.09 crore in December 2024.

A similar growth trajectory is witnessed in card transactions as well, said the RBI report. During CY2024, there were 447.23 crore and 173.90 crore payment transactions worth of Rs 20.37 lakh crore and Rs 5.16 lakh crore through credit and debit cards, respectively.

“While the use of debit cards has declined, credit cards have grown more than 15 per cent on a year-on-year basis in recent years,” it mentioned.

As of December 2024, the financial landscape in India is characterised by the widespread adoption of credit and debit cards, with an astounding 109.9 crore cards circulating throughout the country.

The credit card issued by public sector banks (PSBs) increased from 122.6 lakh as at end-December 2019 to 257.61 lakh as at end-December 2024, a more than 110 per cent jump.

“Private sector banks (PVBs), who hold a 71 per cent market share with 766 lakh cards in December 2024, have leaned into digital solutions and co-branded cards to cater to urban and affluent customers,” the RBI report noted.

Meanwhile, foreign banks have seen a decline both in numbers — from 65.79 lakh cards to 45.94 lakh — and in market share, dropping from 11.9 per cent to 4.3 per cent between December 2019 and December 2024, possibly due to high fees and conservative lending policies.

Small finance banks (SFBs) have entered the arena with 10.97 lakh cards as at end-December 2024, targeting the underserved and focusing on financial inclusivity.

With effect from January 1, 2019, the RBI has mandated the use of only EMV Chip and PIN-based debit and credit cards.

Also, the scope of UPI was expanded by permitting linkage of RuPay credit card to UPI for making payments. Subsequently, it has been expanded by permitting transfer to/from pre-sanctioned credit lines issued by scheduled commercial banks, in addition to deposit accounts.

“In other words, UPI network will facilitate payments financed by credit from banks. This can reduce the cost of such offerings and help in development of unique products for Indian markets,” said the report.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Banks can charge over 30 per cent on credit card dues from customers after the Supreme Court set aside a sixteen-year-old National Consumer Disputes Redressal Commission verdict, which held charging excessive interest rates amounted to an unfair trade practice.

A bench of Justices Bela M Trivedi and Satish Chandra Sharma said NCDRC’s observations that the rate of interest in excess of 30 per cent per annum was an unfair trade practice was “illegal” and an interference with the clear, unambiguous delegation of Reserve Bank of India’s powers.

The court said the ruling was contrary to the legislative intent of the Banking Regulation Act, 1949.

In the opinion of the Supreme Court, banks had in no manner made any misrepresentation to deceive the credit card holders and the pre-conditions of “deceptive practice” and unfair method were manifestly absent.

The court said NCDRC had no jurisdiction to rewrite the terms of the contract entered between the banks and the credit card holders, which the parties had mutually agreed upon.

“We agree with the submissions made by the Reserve Bank of India, that the question of directing the RBI to act against any bank does not arise, in the facts and circumstances of the present case and that there is no question of the RBI being directed to impose any cap on the rate of interest, either on the banking sector as a whole, or in respect of any one particular bank, contrary to the provisions contained in the Banking Regulation Act, and the circulars/directions issued thereunder,” the bench said in its December 20 judgement.

The top court said while the national consumer commission was duly empowered to set aside unfair contracts that were unilaterally dominant or incorporated unfair and unconscionable terms, the rate of interest charged by the banks, determined by the financial wisdom and RBI directives that were duly communicated to the credit card holders from time to time, couldn’t be unconscionable or unilateral.

“The credit card holders are duly educated and made aware of their privileges and obligations, including timely payment and levying of penalty on delay,” the bench said.

The top court said at the time of availing the credit card facility, customers were made aware of the most important terms and conditions, including the rate of interest and they agreed to be bound by the express stipulation by the terms issued by the respective banks.

The verdict said once the terms of the credit card operations were known to the complainants and disclosed by the banking institutions before the issuance of the credit cards, the national commission could not have scrutinised the terms or conditions, including the rate of interest.

“Even on merits, the Reserve Bank of India, has made it clear that there exists no material on record, to establish that any bank has acted contrary to the policy directives issued by the RBI,” it said.

It came on record that the aggrieved party in the case did not approach the statutory authority, the Reserve Bank of India, for any objection against the rate of interest, or the high benchmark prime lending rate.

The matter pertained to the appeals filed by Citibank, American Express, HSBC and Standard Chartered Bank against the NDCRC’s July 7, 2008 order, which held interest rates ranging between 36 per cent and 49 per cent per annum were exorbitant and amounted to the exploitation of borrowers.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)