Credit card spending during the five days of Diwali 2023 soared by 18%, according to Visa's payment data analysis. E-commerce platforms witnessed a 25% surge in transaction volumes, indicating a shift in consumer shopping habits towards online channels during festive seasons. While e-commerce flourished, face-to-face transactions also thrived with 12% growth, Visa said.
Jewellery stores, electronic stores and grocery stores/supermarkets dominated in-store commerce during Diwali 2023. Apparel and accessories along with discount store merchandise took centre stage in online transactions, Visa said.
| Transaction Type | Growth (%) |
|---|
| Total spending | 20% |
| E-commerce | 25% |
| Face-to-face | 15% |
Preceding Diwali, October witnessed record-breaking
credit card spending, as per the Reserve Bank of India's (RBI's) data. Total spending via credit cards surged to ₹1.78 lakh crore, exhibiting 38.3% year-on-year and 25.4% month-on-month increase. E-commerce transactions notably contributed to this surge, reaching ₹1.2 lakh crore, growing by 30% month-on-month.
SBI credit card spending escalated by 42% month-on-month, showcasing the highest increase among banks. ICICI Bank and Axis Bank closely followed with approximately 35% growth, while HDFC Bank lagged with a 17% increase. Electronics, consumer durables, and apparel drove a significant portion of these purchases, with a decline in travel-related spending during this period.
Total cards in force surged to 9.47 million by October-end, primarily driven by ICICI Bank, HDFC Bank, Axis Bank, and SBI, collectively adding over 755,000 cards.
Last month, the RBI implemented stricter norms for personal loans and credit cards in the form of higher capital requirements. The new regulations entail a 25-percentage-point increase in risk weights for banks and NBFCs, necessitating a higher capital requirement for each loan issued. Specifically, the risk weight on retail loans, covering personal loans and credit card loans, has been upped to 125%, up from 100%.
Additionally, the RBI enhanced risk weights for credit card exposures by 25 percentage points to 150% for banks and 125% for NBFCs. However, certain loans such as housing, education, vehicle loans, and those secured by gold or gold jewellery are excluded from these revised risk weight guidelines.
