Credit card default rates have surged to Rs 4,072 crore, accounting for 1.94% of total credit card outstanding as of March 2023, as revealed in a recent report. This concerning increase in default levels was disclosed during a parliamentary session on Tuesday. The data indicates that the gross non-performing assets (GNPAs) in credit cards stood at Rs 3,122 crore in March 2022, escalating to Rs 4,072 crore by March 2023. Additionally, the credit card outstanding balances have risen from Rs 1.64 lakh crore in March 2022 to Rs 2.10 lakh crore in March 2023.
Minister of State for Finance, Bhagwat Karad, shared this data in a written response to inquiries posed in the Rajya Sabha. The figures reveal a significant shift in credit card default patterns over the past year.
Interestingly, the GNPAs in credit cards have witnessed a reduction from 3.56% in March 2021 to 1.91% in March 2022. However, they have once again increased to 1.94% in March 2023. This data is noteworthy when compared to the GNPA of 3.87% recorded by scheduled commercial banks in March 2023.
In addition to credit card defaults, the discussion also touched upon the occurrences of fraud within the cooperative banking sector. In the fiscal year 2022-23, cooperative banks reported a total of 964 fraud cases, involving a cumulative amount of Rs 791.40 crore. This marked a notable increase from the 729 reported cases and Rs 536.59 crore involved in FY21. The growing instances of fraud underscore the need for robust safeguards within the banking system.
Karad emphasized that all cooperative banks are mandated to adhere to the guidelines set forth by the Reserve Bank of India (RBI) at all times. Non-compliance with these guidelines is subject to regulatory scrutiny, with supervisory assessments being conducted on a sample basis. Any non-compliance is dealt with seriously, including the initiation of corrective measures and enforcement actions.
The rising credit card defaults and fraud instances highlight the importance of responsible borrowing and vigilant risk management strategies. As the financial landscape continues to evolve, both lenders and consumers need to exercise caution and adhere to sound financial practices to ensure the stability of the credit ecosystem.
