Indian economy is still cash driven, reflected in high cash in circulation to GDP ratio of 11% (vs. 4-10% in other countries). Low credit card penetration of 28 per 1000 people (vs. 239 to 3,200+ globally), credit card spend to GDP of ~3% and mass proportion of untapped but eligible population (~10% penetration) creates a platform for long term sustainable growth. Further, top 7 out of 32 players corner ~80% market share as business complexity provides space to only few to excel.

SBI card's is the second largest player in the credit card business with market share of ~18% in each, number of cards and spends. SBI card's registered a CAGR of 30% and 45% in number of cards base and card spends respectively.

However, on comparison with CIBIL data SBI card's GNPL remains higher than industry average by ~20-30%. This is also reflected in higher gross and net charge off of 5.5-6% and 4-4.5%.

Continued consumer preference shift, innovation and role of the regulator would be the key in defining the growth of this sector. In India pace of card spend has been robust but surge in UPI payments is enormous, if bundled with credit limits could impact credit card spends. This remains a key risk for the company.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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