Foreign Banks Lose Credit Card Market Share in India

The combined credit card base of five major foreign banks operating in India experienced a notable 7.1% year-on-year contraction, settling at 3.99 million cards by the close of June. This reduction occurred despite a significant expansion within the broader Indian credit card industry during the identical period.

These five foreign issuers collectively shed 304,000 cards, sharply contrasting with the 10.6 million cards added by the overall Indian market. As a direct consequence, their share of outstanding cards diminished by approximately 59 basis points, falling from 3.88% to 3.29%.

Key Credit Card Figures by June End

• Foreign Banks’ Total Cards: 3.99 million
• Foreign Banks’ Year-on-Year Decline: 7.1%
• Foreign Banks’ Market Share: 3.29% (down from 3.88%)
• Indian Industry Total Cards: 121.6 million
• Indian Industry Year-on-Year Growth: 9.6%

Saurabh Bhalerao, associate director, BFSI research, at CareEdge Ratings, noted that this moderation aligns with a strategic shift by foreign banks. Their focus has turned towards portfolio rationalization and targeting premium customer segments, prioritizing profitability over sheer card volume expansion.

Understanding the Strategic Shift

Prakash Agarwal, a partner at Geofin Capital, further explained that this trend indicates foreign banks are deliberately ceding the high-volume credit card market. Domestic lenders are better positioned to capture this segment due to several inherent advantages.

• Larger retail customer bases
• Wider distribution networks across the country
• More aggressive digital acquisition strategies
• Robust co-branded card partnerships

The performance among the foreign banks themselves varied considerably, with some experiencing significant contractions while others managed modest growth or increased spending.

Varied Performance Across Foreign Lenders

• Standard Chartered: Card base dropped by 28% to 581,000 cards, losing 227,000 cards. Expenditure decreased by nearly 18% to ₹693 crore.
• DBS Bank India: Portfolio contracted by 29% to 310,000 cards. Expenditure fell by 18% to ₹338 crore.
• American Express: Reduced outstanding cards by 7.5% to 1.301 million. Card spending increased by more than 16% to ₹5,927 crore.
• HSBC India: Card base grew by 3.5% to 980,000 cards. Expenditure declined by nearly 10% to ₹1,729 crore.
• SBM Bank India: Card base expanded by 17.6% to 828,000. Spending decreased by about 14% to ₹53 crore.

This strategic pivot by foreign banks to focus on premium segments and profitability suggests a continued reshaping of the Indian credit card landscape, with domestic players increasingly dominating the mass-market volume segment.