Why is the second-largest credit card issuer in the country struggling to stay relevant in spending? SBI Cards and Payment Services, a company that once promised aggressive expansion in the credit card market, is now battling to maintain its share of the consumer wallet.

As of June 2025, it held about a 19.1% share of all cards in circulation in India. However, the gap between the number of cardholders and their actual spending behaviour has widened, raising concerns about usage efficiency.

While its overall card base continues to grow steadily, the same cannot be said about the money cardholders are spending.

According to data presented in the company’s Q1 FY26 earnings report, SBI Cards accounted for only 15.6% of total credit card spending in February 2025, a figure that improved to 17.1% in May 2025. That shift, though minor, had investors watching closely.

Margin Stress and Profit Decline

Profitability tells another story.

The company’s Q1 FY26 report, released in July 2025, showed a 6.5% drop in net profit compared to the same quarter in 2024. Profit stood at ₹556 crore, making it the fourth straight quarter of declining earnings. A major reason behind this fall was the 32% year-on-year increase in gross write-offs, which rose to ₹12.8 billion.

Margins have also taken a hit in 2024. A regulatory directive issued by the Reserve Bank of India in November 2023 revised the risk weight on unsecured lending. This has reduced SBI Card’s interest margin, dropping from 23% in March 2022 to just 9% by December 2024.

Stricter credit rules and higher reserves have made it harder for the company to attract big-spending customers with offers and cashback promotions.

Read More – How to Apply SBI Credit Card – Step-by-Step Guide

Here is a summary of recent trends in margin pressure:

Period	Net Interest Margin (%)	Credit Cost Pressure
Mar 2022	23.1	Low
Dec 2024	9	High
Mar 2025	10.2	High

The next section examines how asset quality has shifted during this challenging phase.

Asset Quality Worsens Despite Growth

The company’s growth has come at a cost. Although card issuances are up 10% year-on-year, asset quality is slipping. Net NPAs rose from 0.78% in March 2022 to 1.18% by December 2024, with a similar trend in gross NPAs, signaling more defaults and late payments.

Since credit cards rely on unsecured loans, rising defaults are pushing up provisioning costs and making the company more cautious about approving new applications.

Below is a snapshot of SBI Cards’ asset quality trends:

Metric	Mar 2022	Dec 2024	Mar 2025
Gross NPA (%)	1.38	2.2	2.3
Net NPA (%)	0.78	1	1.21
Write-Offs (₹ bn)	8.4	12.1	12.8

Despite these issues, the company still holds the second-highest number of cards in circulation. But the gap between the user base and actual usage is now under scrutiny.

Spend Share Lags Behind Card Base

As of June 2025, SBI Cards hold about 19.1% of the total credit cards in India, according to RBI and company data. However, when it comes to actual spending on these cards, its performance is weaker.

In February 2025, its market share in spends was only 15.6%. Even though this improved briefly to 17.1% in May, it still stayed below pre-COVID levels.

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This gap shows that SBI Card users, on average, spend less per card compared to customers of leading players like HDFC Bank and ICICI Bank. These banks not only issue more cards but also see higher usage by their customers. It suggests that they are doing a better job of encouraging active and consistent card usage.

This mismatch is evident in the card-to-spend ratio, shown below:

Issuer	Cards in Force (%)	Spend Share (%)
HDFC Bank	24.7	27.1
ICICI Bank	18.2	19
SBI Card	19.1	17.1

The next move for SBI Cards will depend on how effectively it can bridge this gap. High card ownership without high usage affects merchant relationships and partner program viability.

Conclusion

SBI Cards now plans to match its spending strategy with its market share. This includes improving its rewards, partnering with merchants in high-spending categories, and using data to better identify the right customers.

To support this change, the company is likely to reduce promotions for low-spending users and focus more on building loyalty among premium customers.

If successful, this could help SBI Cards regain strength in the credit card spending market. But simply issuing more cards won’t be enough. The company will need to engage more with users who spend regularly, pay on time, and bring steady income.

For now, it remains a strong brand with wide reach but still working to catch up on actual card usage.

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