India’s credit card industry is seeing a clear slowdown in growth, with new card issuance declining sharply even as private sector banks consolidate their dominance, according to a report by JM Financial Institutional Securities. The number of new credit cards issued fell to 4.4 million in the second quarter of FY26, marking a steep 28 per cent year-on-year decline from 6.1 million in the same period last year. As a result, growth in cards in circulation remained subdued at 6 per cent year-on-year, pointing to a broader moderation in consumer credit expansion. Outstanding credit card balances also reflected the slowdown, with growth easing to 9 per cent year-on-year in the second quarter of FY26, compared with 20 per cent growth recorded in FY25. The deceleration was largely attributed to weaker trends in new card issuance. Despite the overall slowdown, private sector banks continued to strengthen their position. Nearly 78 per cent of all new credit cards issued during the quarter came from private banks, while NBFCs and other players continued to lose market share. Private banks’ share in new card issuance rose by around 730 basis points compared with FY25 levels. Asset quality indicators showed a mixed trend. Late-stage delinquencies (PAR 90+) had surged to 15 per cent in FY25 but moderated to 8.9 per cent by the second quarter of FY26. Early-stage delinquencies also improved, although mid-stage delinquencies for private banks edged up during the same period. On spending trends, leading issuers continued to gain ground. Citing RBI data, the report said SBI Cards and HDFC Bank gained 172 basis points and 96 basis points, respectively, in credit card spending market share in FY26 year-to-date. In contrast, ICICI Bank, Kotak Mahindra Bank, RBL Bank and IndusInd Bank ceded share. Across key retail loan segments such as personal loans, home loans and auto loans, public sector banks (PSBs) continued to gain market share from private lenders. JM Financial noted that PSBs improved their disbursement market share across both unsecured and secured segments, supported by higher average ticket sizes, improving asset quality and a gradual recovery in loan growth during the first half and second quarter of FY26.