India's Credit Card Default Rise to Rs 6742 Crore

Credit card usage has rapidly increased in India, driven by higher consumer spending and the growing popularity of digital payments. However, this growth comes with a rise in defaults. As per RBI data, credit card NPAs rose by 28.42 percent to Rs 6742 crore by December 2024, up from Rs 5250 crore a year earlier. This nearly Rs 1500 crore increase coincides with an economic slowdown.

While banks have succeeded in reducing overall NPAs from Rs 5 lakh crore to Rs 4.55 lakh crore, unsecured loan segments like credit cards tell a different story. Credit card NPAs now make up 2.3 percent of Rs 2.92 lakh crore outstanding, compared to 2.06 percent the previous year. Since 2020, defaults have jumped over 500 percent, highlighting rising borrower indebtedness and financial stress.

RBI increased risk weights in 2023 to contain potential risks. Experts caution that high interest rates—up to 46 percent—can trap unaware borrowers in long-term debt.