10 December 2024 12:36 am Views - 296
The latest data available through October 2024 showed that the total outstanding card balance was at Rs.151.29 billion, up Rs.188 million from the month prior.
For the first 10 months, the total outstanding growth in credit card debt was still Rs.80 million, off the levels at the start of 2024.
This is despite the Rs.74.3 billion growth in the total outstanding growth in private sector credit in the licensed commercial banks for the same month, reflecting that credit is picking up in a start of a fresh credit cycle.
It appears that the interest rates are still too restrictive for the card holders to start spending more meaningfully. However, it is expected that the spending could be more in November and December, with the festive and holiday spending kicking in.
The banks are offering a flurry of shopping deals and promotions on their cards to woo the card holders into making more and higher spending through their credit cards.
The banks were until recently wary of aggressively promoting their cards, due to the uncertainty over the direction of the economy and rates.
However, they are now reassured of the continuity of lower rates and the continuous growth in the economy, which provide them confidence in their borrowers’ ability to repay the loans.
Further, the consumer sentiments have also improved, as they have now begun spending, with the prices of some commodities coming down, making them more inclined to spend on things they had to forgo for more than two years.
The banks have also issued 6,653 new cards in October, bringing the total number of new cards that were offered in the first 10 months of the year to 25,904.
The banks have stepped up promoting their cards, considering the positive developments in the rates and overall economy.