Banks have seen a sharp rise in credit card applications in the wake of the note ban even as other retail borrowings have slowed down, reflecting a conscious migration from cash-based to digital transactions . “Demonetisation has given card business a leg-up,“ said SBI chairman Arundhati Bhattacharya. “We believe that if we continue our efforts towards digitisation, it should bode well for our cards business.“Banks have also been cautious about issuing credit cards after the crisis in 2008 when credit card outstandings rose sharply, adding to the banking sector's non-performing loans then. But they are now relying more on credit bureau scores in assessing the credit worthiness of credit card seekers. “We believe demonetisation is set to pave the way for a more cashless economy , in turn fuelling wider credit penetration and financial inclusion,“ said Amrita Mitra, vice president financial services research and consulting at TransUnion CIBIL.The immediate impact of the currency ban has been the rise of credit card transactions by 9.5% in November last.

Source: Economic Times January 18, 2017 05:46 UTC