India’s top eight districts account for 50% of SCB outstanding credit cards

CHENNAI: Rise in personal loans has been a matter of concern for RBI.

As on September 2023, they accounted for one-third (33.2%) of the scheduled commercial borrowing (SCB) loan portfolio.

It is the fastest growing loan segment – 31% as on quarter ending Sep 2023 against agriculture (16.8%), industry (6.1%) and services (23.5%), a report revealed.

In November 2023, RBI had raised concerns on growth in personal loans and increased risk weightage on consumer credit excluding home, vehicle, education and gold loans.

The focus was largely on unsecured loans such as unsecured personal loans, personal credit card loans.

The sharp increase on unsecured loans can be seen as a post COVID-19 phenomenon relating to income challenges and burst on consumption expenditure.

Researchers conducted a granular district-wise analysis – CAGR growth (2019-20 to 2022-23), and share of outstanding the personal credit cards over the last three years.

Key findings:

•​Despite close to reaching 100 million credit cards across India, outstanding CC is urban-centric in large cities. Top eight districts account for about 50% of SCB outstanding credit cards loans of Rs 1,98,862.5 crore as of March 2023

•​Mumbai-suburban tops the list accounting for 18% of the outstanding personal credit cards and also growing at a CAGR of around 18%

•​Kolhapur is a surprising second spot with 8% of the share

•​Chennai is at third spot, ahead of Bengaluru reflecting a fast cosmopolitan population driving lifestyle changes

•​Thane has the Mumbai effect with CAGR growth of 50% establishing itself as one of the foremost urban centre after the metros for consumerism

•​Jaipur has a CAGR of 36% indicating life-style changes and employment in service industry such as IT service, BPO, back-offices etc

•​The NCR region of Noida, Gurugram and Ghaziabad do not reflect the spends as in case of Thane as its value of around Rs 6,000 cr is sum total of all these districts.