PSBs Capture Bigger Slice of Credit Card Spending, Hit 22.2% Share in December 2025
Higher usage, festive demand, and UPI-linked RuPay cards power public sector banks’ steady resurgence
Public sector banks (PSBs) have raised their share of India’s credit card spending to 22.2% in December 2025, marking a clear shift in a market long dominated by private lenders.
Reserve Bank of India data show the PSB share grew 4.5% year on year, signaling stronger engagement and deeper customer penetration.
Large state-run lenders drove most of the gains. Their combined share alone reached 21.8%, underscoring concentrated strength at the top.
Key highlights:
- 22.2% total market share in December 2025
- 4.5% YoY growth in spending share
- Large PSBs contributed the bulk of expansion
For a segment once viewed as a private-bank fortress, the numbers reflect steady strategic execution.
Higher Utilisation Drives Momentum
The surge stems less from new card issuance and more from improved usage.
Per-card spending for PSBs jumped 27% to â‚ą16,500, pointing to stronger activation among existing customers.
Growth drivers:
- Higher utilisation in mass retail categories
- Strong festive season demand
- Expansion into tier-2 and tier-3 cities
- Wider reach among salaried customers
PSBs are extracting more value per customer, not merely scaling portfolios.
Private sector banks still dominate with a 72.5% market share, but momentum softened during the period.
Their share declined 3.75% year on year, while average spending per card fell 6% to â‚ą18,072.
Underlying trends:
- Rapid card issuance expanded the base
- Lower utilisation among newer customers
- Dilution in average per-card spend
It’s a scale-versus-engagement tradeoff playing out in real time.
UPI-Linked RuPay Cards Reshape the Landscape
A structural shift began in late 2022 when regulators enabled RuPay credit cards on the UPI network.
That decision has accelerated adoption across daily-use categories.
Market impact:
- RuPay cards now hold 16% market share, up from 3% two years ago
- UPI-linked credit card transactions form 40% of volume
- They account for 8% of total transaction value
Spending is especially strong in groceries, fuel, utilities, apparel, department stores, and restaurants.
By merging credit cards with India’s dominant digital rail, regulators effectively widened acceptance. It’s like plugging a premium product into the country’s busiest payments highway.
Online and Offline Trends Favor PSBs
Growth is visible across digital and physical channels.
Ecommerce transactions grew 9.8% year on year, but PSBs recorded a sharp 50.5% surge, compared with 2.3% growth for private banks.
Offline momentum:
- PSBs’ offline transactions rose 16.6%
- Private banks grew 5.4%
The divergence underscores strengthening competitiveness beyond seasonal spikes.
The Bigger Picture
PSBs are no longer peripheral players in India’s credit card race.
Improved utilisation, regulatory tailwinds, and deeper regional penetration have tightened the competitive gap.
Private lenders retain scale and higher per-card spends. But with UPI-linked credit expanding rapidly, could PSBs narrow the distance further in 2026?
TL;DR:
PSBs lifted their credit card spending share to 22.2% in December 2025, driven by 27% higher per-card spending, festive demand, and rapid growth in UPI-linked RuPay cards. Private banks’ share fell to 72.5% amid declining per-card usage, signaling a shift in competitive momentum.
AI summary:
- PSB share rose to 22.2% in Dec 2025
- Per-card spending increased 27% to â‚ą16,500
- Private banks’ share fell to 72.5%
- RuPay cards grew to 16% market share
- UPI-linked credit drives transaction expansion
