Credit card inquiries in Oct surpass year-ago figures: Transunion Cibil

RBI Governor Shaktikanta Das had last week said that sustainability of the demand needs to be watched. The inquiries – wherein a bank or financial institution checks on a user's credit history - had fallen to as low as 5 per cent in April when compared to the year-ago period, and improved to 61 per cent in July versus the same period in 2019 and shot up further to 106 per cent of the October 2019 levels in October 2020, it said.


PTI | Mumbai | Updated: 30-11-2020 16:23 IST | Created: 30-11-2020 16:23 IST
Credit card inquiries in Oct surpass year-ago figures: Transunion Cibil
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  • India

Banks' requests for information on credit card borrowers or 'credit card inquiries' in October surpassed the same in the year-ago period, a credit information company said on Monday. This phenomenon suggests consumer economic activity has materially improved since the easing of COVID-19 lockdown measures, Transunion Cibil, a credit information company, said.

It can be noted that the festivities, coupled with pent-up demand during the lockdown, had resulted in improvement in many economic indicators in October. However, many observers are skeptical whether the same will continue ahead. RBI Governor Shaktikanta Das had last week said that sustainability of the demand needs to be watched.

The inquiries – wherein a bank or financial institution checks on a user's credit history - had fallen to as low as 5 per cent in April when compared to the year-ago period, and improved to 61 per cent in July versus the same period in 2019 and shot up further to 106 per cent of the October 2019 levels in October 2020, it said. "It is encouraging to see credit card inquiry levels making a full recovery following an easing of lockdown measures. The acceleration and increased adoption of digital forms of payments means that the ongoing festive season looks promising for the cards business," the agency said.

The company said the pandemic has resulted in increased adoption of digital means of payments and this benefits credit cards through increased demand. Social distancing rules and lockdowns have forced consumers to rethink how they spend, with digital payments becoming an increasingly attractive, or even necessary, option in order to transact and make purchases in a virtual environment, it said.

The agency said origination volumes for credit cards in April 2020 were only 9 per cent of the year ago period, and recovered to 37 per cent in July as compared to the same in the year-ago period, but did not share the same figure for October. The outstanding balances in July were 32 per cent higher when compared to July 2019, as against a growth of 33 per cent witnessed in July 2019 over July 2018, it said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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