Credit Card issuance declines in Q2FY26 amid slowing consumer credit growth: JM Financial
2 min readIndia’s credit card industry is experiencing a notable slowdown, marked by a sharp contraction in new card issuance despite private sector banks strengthening their market dominance, reveals new analysis by JM Financial Institutional Securities.
Second-quarter FY26 saw only 4.4 million new credit cards issued—a significant 28% year-on-year decline from the 6.1 million cards issued during the same period in FY25. This pullback has constrained growth in active cards to just 6% year-on-year, reflecting a broader deceleration in consumer credit expansion.
Outstanding balances mirrored this trend, growing at 9% year-on-year in 2QFY26 compared to 20% growth in FY25, primarily due to reduced issuance momentum.
Despite the sector-wide slowdown, private banks captured 78% of new card issuances during the quarter, extending their market leadership. Non-banking financial companies (NBFCs) and smaller players saw continued erosion in their foothold. Private banks expanded their market share in new card issuance by approximately 730 basis points compared to FY25 levels.
Asset quality metrics showed uneven trends. While severe delinquencies (PAR 90+) halved from FY25’s peak of 15% to 8.9% in 2QFY26, mid-stage delinquencies among private banks crept upward even as early-stage defaults showed improvement.
Spending patterns revealed diverging trajectories among major issuers. RBI data indicated SBI Cards and HDFC Bank collectively gained over 268 basis points in credit card expenditure market share during FY26 year-to-date. Meanwhile, ICICI Bank, Kotak Mahindra Bank, RBL Bank, and IndusInd Bank relinquished portions of their shares.
In broader retail lending, public sector banks (PSBs) mounted a gradual comeback against private competitors across personal, home, and auto loan segments. JM Financial highlighted PSBs’ improved disbursement market share, attributed to larger average loan sizes, better asset quality, and resurgent growth in the first half of FY26.
Published on December 23, 2025
