credit card Image Credit source: ai generated

When we talk about credit cards, the names of big private banks come first in our mind. But, recent data from the Reserve Bank of India (RBI) is changing this established perception. The trend of spending on credit is fast becoming mainstream in the country and now public sector banks (PSU Banks) are giving tough competition to private players in this race. By the end of March 2026, the number of credit card users in India has crossed 11.9 crore (119 million).

These four dominate the cards market

According to the report of CareAge Ratings, there were about 11 crore credit cards in the country in March 2025, which increased to 11.9 crore within just one year. This figure shows how fast card penetration is increasing in the Indian economy.

However, despite being so large, this market is very concentrated. HDFC Bank (HDFC), SBI Cards (SBI), ICICI Bank (ICICI) and Axis Bank (Axis) still remain the 'Big 4' of this market. The interesting thing is that the top 3 private banks and 5 big government banks together control 80 percent of the cards in the market. HDFC Bank is still at the forefront in this race with 22.2% market share and highest transaction value.

Government banks won in

Even though private banks are ahead in total market share, when it comes to new growth, public sector banks have won. According to the data, the total outstanding credit card base increased by 8 percent on an annual basis in the month of March. The most shocking figure in this was that of government banks, which registered an excellent growth of 11.3 percent year-on-year. In comparison, the growth of private banks was limited to only 8.3 percent. At the same time, foreign banks are continuously closing their business and the number of their cards has declined by 5.4 percent.

How is the picture of public sector banks changing?

There is no overnight miracle behind this fast growth of public sector banks, but a well-thought-out strategy.

1. Huge jump in expenditure: While the average expenditure per card of private bank customers has fallen by 4 per cent to ₹ 18,948, the average expenditure per card of government bank customers has increased by 17 per cent. This figure has now increased to ₹ 16,847.
2. Benefit of UPI linkage: The facility of linking credit card with UPI has given a new weapon to public sector banks.
3. Deep penetration in small towns: According to Prakash Aggarwal, partner, Zephyn Capital, government banks are taking full advantage of their huge distribution network. Their strong hold in Tier-2 and Tier-3 (smaller cities and towns) is proving to be most important in adding new customers.
4. Co-Branded Partnership: The strategy of launching new cards in collaboration with e-commerce companies and fintech platforms has also proved to be a game-changer for public sector banks.

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