Credit card issuance declines in Q2FY26 due to slowing consumer credit growth: JM Financial

According to a recent report by JM Financial Institutional Securities, the Indian credit card industry is witnessing a marked slowdown in growth, with issuance of new cards declining sharply even as private sector banks continue to consolidate their dominance.

The number of new credit cards issued fell to 4.4 million in the second quarter of FY26, a steep decline of 28 percent year-on-year compared to 6.1 million cards issued in the same period last year, the report said.

As a result, growth in cards in circulation remained subdued at 6 percent year-on-year, underscoring a broader moderation in consumer credit expansion.

Outstanding credit card balances also reflected this slowdown. Balance growth fell to 9 percent year-on-year in Q2FY26, significantly lower than the 20 percent growth in FY25, largely due to weaker card issuance trends.

Despite the general slowdown, private banks have strengthened their hold on the market. Nearly 78 percent of all new credit cards issued during the quarter were from private sector lenders, while NBFCs and other players continued to lose ground, the report pointed out.

Private banks’ market share in new card issuance increased by around 730 basis points compared to FY25. Asset quality indicators showed a mixed picture.

While late-stage delinquencies (PAR 90+) had increased to 15 percent in FY25, they declined to 8.9 percent in Q2 2026. Early-stage delinquencies also showed an improvement, though mid-stage delinquencies of private banks showed a slight increase over the same period.

In terms of spending, the main issuers continued to gain popularity. Citing RBI data, the report states that SBI Cards and HDFC Bank have gained 172 basis points and 96 basis points respectively in credit card spend market share in FY26 year-to-date. On the other hand, players like ICICI Bank, Kotak Mahindra Bank, RBL Bank and IndusInd Bank lost market share.

In terms of key retail lending segments such as personal loans, home loans and car loans, the report says that public sector banks (PSBs) are steadily gaining market share from private sector lenders, according to JM Financial.

The report notes that PSBs have improved their position in terms of disbursement market share in both the unsecured and secured credit segments, supported by higher average ticket sizes, improved asset quality and a gradual recovery in credit growth during the first half and second quarter of FY26.

It said that in terms of market share in disbursements, PSB has gained in personal, home and auto loans.

Published on December 23, 2025