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<ul class="summary-list"><li>EV stocks fell on Wednesday after a report said President-elect Trump plans to cut EV tax credits.</li><li>The $7,500 tax credit was part of Biden's Inflation Reduction Act, put into place in 2022.</li></ul>Electric vehicle stocks dropped on Wednesday after a report said President-elect Donald Trump's transition team is looking at doing away with the EV tax credit. According to a report from <a target="_blank" class="" href="https://www.reuters.com/business/autos-transportation/trumps-transition-team-aims-kill-biden-ev-tax-credit-2024-11-14/">Reuters</a>, Trump's transition team has drawn up plans to end the $7,500 consumer tax credit for electric vehicle sales as part of broader tax reform legislation.<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> stock dropped 5% to $312.20 a share following the report. Shares of <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/rivn-stock">Rivian</a> plunged 12% to $10.57, and <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/lcid-stock">Lucid</a> dropped 3% to $2.11 a share.Ending the tax credit—a key measure included in Biden's 2022 <a target="_blank" class="" href="https://www.businessinsider.com/house-passes-inflation-reduction-act-sending-it-to-biden-2022-8">Inflation Reduction Act</a>—would likely hurt EV sales, but sources told Reuters that Tesla representatives supported ending the subsidy. Tesla CEO Elon Musk has become a strong ally of Trump in recent months, supporting his campaign with sizable donations and spending time with him at his Mar-a-Lago residence.Musk has said previously that while ending federal tax incentives for EV purchases would hurt Tesla sales, the move would be more damaging to Tesla's US EV competitors, including General Motors and Ford. <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/gm-stock">General Motors</a> stock jumped about 1% on Wednesday, while <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/f-stock">Ford</a> shares were about flat.Reuters noted that the tax credit is likely an easy target. Other pieces of the Inflation Reduction Act could be hard to roll back, as the money for many programs has already been distributed. Eliminating the tax credit would likely garner wide support from Republicans and help offset the costs of future tax cuts.

EV makers slide on report Trump wants to scrap EV tax credit

16 million credit cards purchased in FY 2023-24, UPI payments up by 42%: PwC report

As Finance Minister Nirmala Sitharaman holds a review meeting with heads of Public Sector Banks and Regional Rural Banks on Monday, the State Bank of India (SBI) in its latest report noted that the belief that the deposit growth in the banking sector is flagging is just a statistical myth. However, the report highlighted that, while it's true that <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword> has outpaced deposit growth in recent years, leading some to trumpet this as a sign of decelerating deposit activity, a deeper analysis reveals a different story. The report highlighted that in FY23, the banking sector, particularly All Scheduled Commercial Banks (ASCBs), registered the highest absolute growth in both deposits and credit since 1951-52. Deposits grew by an impressive Rs 15.7 lakh crore, while credit expanded by Rs 17.8 lakh crore, pushing the incremental Credit-Deposit (CD) Ratio to a staggering 113 per cent. The momentum continued into FY24, with deposits rising by Rs 24.3 lakh crore and credit by Rs 27.5 lakh crore. Despite the narrative suggesting a slowdown in deposit growth, the data tells us otherwise. Since FY22, incremental deposit growth has actually outpaced incremental <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>, with deposits increasing by Rs 61 trillion compared to Rs 59 trillion in credit. "Decadal Deposits have expanded by a sharp 2.75 times, but Decadal credit expanded by 2.8 times since FY22, deposits expanded Rs 61 trillion vis-a-vis credit expansion at Rs 59 trillion," said the report. The report noted that the key issue at play here is not the quantum of deposits but the pricing. Historical trends have shown periods where credit and deposit growth diverge for 2 to 4 years. "The myth of a flagging deposit growth appears as just a statistical myth with credit growth outpacing deposit growth being tom-tommed as a deceleration in deposit growth" said the report. According to a Reserve Bank of India (RBI) study, as of June 2024, we are in the 26th month of this divergence, with predictions indicating that the cycle could end between June and October 2025. "The end of the divergence cycle could be June 2025 -October 2025" the report noted. The report also added that once this divergence ends, deposit growth is expected to pick up, while credit growth could slow significantly, signaling the beginning of a rate reversal cycle and a potential economic slowdown. Another noteworthy trend in the banking system is the decline in CASA (Current Account Savings Account) deposits. The report stated that the CASA deposits fell to 41.0 per cent in FY24 from 43.5 per cent in FY23, largely due to a decline in SB (Savings Bank) deposits. This decline, while somewhat aligned with pre-pandemic levels of 42 per cent, reflects a shift in how SB deposits are being used. Increasingly, SB deposits are being used primarily for transactional purposes, particularly UPI transactions, leading to greater movement across the banking system and raising concerns about the stability of SB deposits. Moreover, the rising returns on term deposits have been driving a significant compositional shift in bank deposits. The share of term deposits in total deposits has increased to 59.0 per cent in FY24 from 56.5 per cent in FY23, while the share of CASA deposits has continued to decline. The report said that this shift is a natural response to the increasing interest rate environment, as funds move from low-interest CASA accounts to higher-yielding time deposits. On an incremental basis, term deposits accounted for nearly 78 per cent of the total deposits in FY24, underscoring the impact of higher <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> on deposit behavior. In conclusion, while the myth of declining deposit growth may persist, the reality is more nuanced. Deposit growth remains strong, with term deposits taking a larger share of the pie as <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> rise. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-9-pro-fold-launched-in-india-at-172999-but-you-cant-get-your-hands-on-it-right-now/articleshow/112517193.cms">Google Pixel 9 Pro Fold launched in India at ₹1,72,999, but you can’t get your hands on it right now</a> <a href="https://www.businessinsider.in/stock-market/news/ipo-scam-two-victims-from-hyderabad-lose-over-11crore-in-fake-ipo-scams/articleshow/112488051.cms">IPO scam – Two victims from Hyderabad lose over ₹11 crore in fake IPO scams</a> <a href="https://www.businessinsider.in/tech/news/indias-wearables-market-decline-for-the-first-time-as-smartwatch-shipments-fall/articleshow/112397246.cms">India’s wearables market decline for the first time as smartwatch shipments fall</a>

SBI report dismisses bank deposit concerns as a 'Statistical Myth'

<keyword id="7457881" type="General" weightage="100" keywordseo="private-credit" source="Orion">Private credit</keyword> deployments are likely to surpass the $10 billion mark in 2024, a report by a consultancy firm EY said on Wednesday. The January-June period saw private credit transactions of over $6 billion in 96 deals, and the last two-and-a-half years have seen over $20 billion being deployed in the emerging alternative serving the credit needs of Indian companies. Major deals were witnessed across real estate, infrastructure, and healthcare sectors in the first half of the year, the report by EY said. Domestic funds are gaining traction and market share in the private credit space leveraging local expertise and the influence of lower-cost domestic money, it said. The first half of the year saw <keyword id="23077048" type="General" weightage="20" keywordseo="reliance-logistics" source="keywords">Reliance Logistics</keyword> and Warehousing, Vedanta Semiconductors, and Matrix <keyword id="19933821" type="General" weightage="20" keywordseo="pharma" source="keywords">Pharma</keyword> collectively raising approximately $1.3 billion, while real estate sector continued to be a focal point with borrowers such as <keyword id="20197996" type="General" weightage="20" keywordseo="prestige-group" source="keywords">Prestige Group</keyword>, <keyword id="21275229" type="General" weightage="20" keywordseo="puravankara-group" source="keywords">Puravankara Group</keyword>, Kalpataru Group, and Shapoorji Group being active. The firm's partner Bharat Gupta said private credit investments are at an all-time high, driven largely by growth-oriented strategies. "The outlook remains promising, though thorough due diligence and effective deal oversight are crucial to maximizing returns and managing potential risks," Gupta added. With the maturing of the system, there is a subtle shift towards performing credit deals in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> with funds increasingly engaging in sub-18% <keyword id="22335519" type="General" weightage="20" keywordseo="internal-rate-of-return" source="keywords">Internal Rate of Return</keyword> (IRR) transactions, the report said. In the high-yield segment, mergers and acquisitions/buyout deals, and bridge-to-initial public offering transactions have gained traction within private credit funding, it said. High-net-worth investors and family offices are increasingly participating in private credit as a key asset class, boosting the popularity of domestic funds, it added.

Private credit deals to touch $10 billion in 2024, says EY report

<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="23127366" type="General" weightage="20" keywordseo="consumption-loan" source="Orion">consumption loan</keyword> portfolio grew by 15.2% year-on-year (YoY) to Rs 90.3 lakh crore as of March 2024, according to the latest <keyword id="6354680" type="General" weightage="20" keywordseo="credit" source="Orion">credit</keyword> bureau report. The fourth edition of the CRIF High Mark report noted a slowdown from the 17.4% growth recorded in March 2023, largely due to a deceleration in the home <keyword id="6362287" type="General" weightage="100" keywordseo="loans" source="Orion">loans</keyword> segment, which accounts for 40.1% of the overall consumption loan portfolio by value. The home loans portfolio saw growth slowing down to 7.9 % YoY in FY24, from the 23 % expansion seen in FY23. This was mainly due to muted growth in "originations", which increased by 9.2 % in FY'24 compared to 18.2 % in the previous fiscal year. Origination refers to the process by which a lender creates or initiates a new loan or credit, including evaluating, processing, and approving a borrower's application. The report finds a shift toward higher <keyword id="6871589" type="General" weightage="20" keywordseo="ticket-size" source="Orion">ticket size</keyword>s, with a growing preference for loans above Rs 35 lakh, although the average ticket size (ATS) rose by 32% from Rs 20.1 lakh in FY20 to Rs 26.5 lakh in FY24. In contrast, the personal loans segment maintained strong momentum, growing by 26% YoY in FY24, despite recent regulatory reforms. Larger ticket loans of Rs 10 lakh and above increased their share in originations by value, while loans under Rs 1 lakh continued to dominate in volume. Banks led in value-based originations, whereas non-banking financial companies (NBFCs) remained dominant in volume. Two-wheeler loans experienced a 34% YoY growth in FY24, up from 30% in FY23, fueled by a shift to higher ticket-size loans. However, the overall volume of originations grew at a slower pace of 13% in FY24 compared to 32% in FY23. <keyword id="35527" type="General" weightage="20" keywordseo="auto-loans" source="Orion">Auto loans</keyword>, on the other hand, grew by 20% YoY in FY24, compared to 22% in FY23. Consumer durable loans posted a robust growth of 34% YoY in FY24, up from 26% expansion in the previous fiscal. This growth was driven by a shift to larger ticket sizes, although origination volumes grew by only 8.5% in FY24, compared to 38.2% in FY23. The MSME lending segment displayed mixed results, with individual MSME loans growing faster than entity MSMEs. The individual MSME portfolio increased by 29% YoY in FY24, accelerating from 15% in FY23, while entity MSME loans grew by just 6.6 % YoY, a sharp slowdown from 17.2 % in the previous year. Microfinance lending also saw strong growth, with the portfolio rising by 27% YoY in FY24, compared to 21% in FY23. "The resilience of the Indian credit market is evident in the strong performance across various lending categories and the stability in delinquencies. Home loans remain dominant, but the growth in personal loans, two-wheeler loans, and the rebound of NBFCs highlight significant shifts in the lending landscape," CRIF High Mark MD Sanjeet Dawar said.

Consumption loan portfolio expands 15% to Rs 90 lakh crore in FY24, notes CRIF report

Amid questions on the depleting <keyword id="20776807" type="General" weightage="100" keywordseo="loan-to-deposit-ratio" source="keywords">loan-to-deposit ratio</keyword> in <keyword id="19895091" type="General" weightage="20" keywordseo="Indian-banks" source="keywords">Indian banks</keyword>, a recent report by <keyword id="19896146" type="General" weightage="20" keywordseo="Motilal-Oswal" source="keywords" meta.keywordsubtype="org" meta.entityname="Motilal Oswal" meta.hostid="269" meta.entityid="Motilal Oswal">Motilal Oswal</keyword> suggests that the loan-to-deposit (LD) ratio is likely to subside on its own in the coming months. The debate on loan-to-deposit ratio (LD), particularly concerning sluggish <keyword id="19998084" type="General" weightage="20" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> and potential risks to <keyword id="20089808" type="General" weightage="20" keywordseo="financial-stability" source="keywords">financial stability</keyword> is raised by even the finance minister and the <keyword id="20151998" type="General" weightage="20" keywordseo="RBI-governor" source="keywords">RBI governor</keyword>. However, the report notes that on closer examination, the situation may not be as alarming as it seems. As of 9th August, 2024 the Indian <keyword id="19964544" type="General" weightage="20" keywordseo="banking-sector" source="keywords">banking sector</keyword>'s loan-to-deposit (LD) ratio stood at 77.2 %, which is slightly below its recent peak of 78.2 % on 22nd March 2024, and its all-time high of 78.8 % in September 2013. The report stated that typically a rising LD ratio is indicative of a tightness in the banking sector, potentially indicating overheating. A lower LD indicates that the bank is aggressive in its credit disbursement practises, which could be risky. It highlighted that an analysis of the sector's transactions with the Reserve Bank of India (RBI) through the liquidity adjustment facility (LAF), along with recent trends in the weighted average call rate (WACR), suggests that the current rise in the LD ratio does not indicate tightness, which is why there is no immediate cause of concern. In fact, the report added that the concern over weak deposit growth may be overstated. Historical data show that bank deposits grew at an average rate of 9.5 % during the pre-COVID period (January 2015 to February 2020) and 10.4 % in the post-COVID period (March 2020 to August 2024). Earlier, Finance Minister Nirmala Sitharaman also urged state-run banks to enhance deposit mobilization through attractive offers and focusing on Tier-2 and Tier-3 cities. Loan-to-deposit ratio pegs the total deposits received by the bank against the loans it has offered. It helps in understanding how liquid the bank is. The loan-to-deposit ratio (LDR) is a financial metric that compares a bank's total loans to its total deposits. It's used to assess a bank's liquidity and credit risk, and to inform lending and deposit-taking decisions The report said while the exact measures are unclear, the deposit growth could potentially be increased by making other asset classes less attractive through taxation or interest rates, or by boosting fiscal spending to increase net credit to the government. In its forecast, the report noted that private banks will witness a moderation in their <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>, while public sector banks will maintain a healthy credit growth rate. "Our analysis suggests that deposit growth could be raised by either making other asset classes unattractive (through taxation and/or interest rate) or increasing the growth in net credit to the government by pushing fiscal spending higher" the report added. Alternatively, policymakers might consider curtailing loan growth to lower the LD ratio. However, this could slow deposit growth, particularly if corporate credit growth remains weak. Encouraging savers to shift investments from other assets to bank deposits could also be an option, but this carries risks of overreach and potential damage to economic confidence. Das had also flagged the excessive growth, or froth developing in the personal loan space. Notably, while credit growth in unsecured personal loans like credit cards continues to decline, it remains elevated at 23.3% as of June 2024. However, this is a significant reduction from 34.2% witnessed in November 2023. As fiscal spending increases, bank credit to the government is likely to grow, which should elevate deposits and broad money supply. The report said "However, the extent of foreign capital inflows and the RBI's policy for managing these inflows remain uncertain". Last month, RBI governor Shaktikanta Das had also addressed this issue in the 50th meeting of MPC (Monetary Policy Committee). Per him, deposit mobilisation has been lagging credit growth for some time now. This may potentially expose the system to structural liquidity issues. "While there could be a debate regarding ‘deposits funding loans’ vis-à-vis ‘loans funding deposits’, the current regulatory concern stems from the fact that there could be structural changes happening which banks need to recognise and, accordingly, devise their strategies. Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to capital markets and other financial intermediaries", Das said. Per him, while bank deposits continue to remain dominant as a percentage of financial assets owned by households, their share has been declining consistently, since households are now increasingly allocating their savings to mutual funds, insurance funds, pension funds and other avenues.

Loan-to-deposit ratio will subside on its own in coming months, notes Motilal Oswal report

A research report by the <keyword id="19934368" type="General" weightage="100" keywordseo="state-bank-of-india" source="keywords">State Bank of India</keyword> (SBI) highlights the continuous upward trend in credit growth in Indian <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword>, which is outpacing the growth of deposits. This trend persists even as Indian households have substantially increased their investments in <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and equities. For the last several months, investments of over Rs 21,000 crore are being done in mutual funds. Last month, during an event, <keyword id="20151998" type="General" weightage="20" keywordseo="RBI-Governor" source="keywords">RBI Governor</keyword> <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> noted that households are opting for capital markets over banks to invest or park their savings. However, the <keyword id="20352499" type="General" weightage="20" keywordseo="SBI-report" source="keywords">SBI report</keyword> states, "Latest fortnightly credit and deposit growth number shows credit growth continues to outpace deposit, though moderated from last year growth of 16.2 percent (June'23 YoY)." Specifically, for the fortnight ending July 12, 2024 the report noted that the credit growth for All Scheduled Commercial Banks stood at 14 per cent on a year-on-year basis, while deposit growth was reported at 11.3 per cent. Furthermore, the report also served a significant increase in credit to the industrial sector, which rose from 5.1 percent in March 2023 to 8.4 percent in March 2024, and recorded 8.1 percent growth in June 2024 year-on-year. This indicates a robust demand for credit within the industrial sector. Despite big savings going towards the capital markets, banks have managed to gather an incremental deposit of Rs 7.02 lakh crore in the year-to-date (YTD) period ending July 12, 2024. In comparison, the incremental credit extended by the banks amounted to Rs 3.80 lakh crore during the same period. This discrepancy illustrates that while credit growth is substantial, deposit growth remains essential to maintain balance. Additionally, the report highlighted that banks' reliance on high-cost deposits, such as Certificates of Deposit (CDs), has more than tripled. This increase is a response to the need to match the rising credit demand, showing how banks are adjusting their funding strategies to accommodate the growing demand for loans. <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> Governor stated last month, "While bank deposits continue to remain dominant as a percentage of the financial assets owned by the households, their share has been declining, with households increasingly allocating their savings to Mutual Funds, Insurance Funds, and Pension Funds."

Credit growth in banks continues to exceed deposits, says new SBI report

The bad assets or gross <keyword id="19964545" type="General" weightage="20" keywordseo="NPAs" source="keywords">NPAs</keyword> of commercial <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> fell to a 12-year low of 2.8% in March 2024 and may go down further to 2.5% by the end of the current fiscal, said the <keyword id="19899808" type="General" weightage="100" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="269" meta.entityid="RBI">RBI</keyword>'s <keyword id="678734" type="General" weightage="20" keywordseo="Financial-Stability-Report" source="Orion">Financial Stability Report</keyword> (FSR) released on Thursday. <keyword id="19982351" type="General" weightage="20" keywordseo="Scheduled-Commercial-Banks" source="keywords" meta.keywordsubtype="org" meta.entityname="Scheduled Commercial Banks" meta.hostid="269" meta.entityid="Scheduled Commercial Banks">Scheduled Commercial Banks</keyword>' (SCBs) gross <keyword id="6401657" type="General" weightage="20" keywordseo="non-performing-assets" source="Orion">non-performing assets</keyword> (<keyword id="19982350" type="General" weightage="20" keywordseo="GNPA" source="keywords">GNPA</keyword>) ratio fell to 2.8%, and the net non-performing assets (NNPA) ratio to 0.6% at the end of March 2024. "The asset quality of SCBs recorded sustained improvement, and their GNPA ratio moderated to a 12-year low in March 2024. Their NNPA ratio too improved to a record low," said the June FSR. Among bank groups, public sector banks (<keyword id="20012926" type="General" weightage="20" keywordseo="PSBs" source="keywords">PSBs</keyword>) recorded a substantial reduction (76 bps) in their GNPA ratio during H2 2023-24. While the GNPA stock decreased across all bank groups, active and deep provisioning by PSBs and foreign banks (FBs) resulted in an improved provisioning coverage ratio (PCR) in March 2024, the report said. The half-yearly slippage ratio (viz, new NPA accretions as a share of standard advances) decreased across bank groups. Though the amount of write-offs declined during the year, the write-off ratio remained almost at the same level a year ago due to a reduction in GNPA stock, the FSR said. Overall, it added the sustained reduction in the GNPA ratio since March 2020 has been primarily due to a persistent fall in new NPA accretions and increased write-offs. The RBI said macro stress tests are performed to assess the resilience of SCBs' balance sheets to unforeseen shocks emanating from the macroeconomic environment. These tests attempt to assess capital ratios over a one-year horizon under a baseline and two adverse (medium and severe) scenarios. "The GNPA ratio of all SCBs may improve to 2.5% by March 2025 under the baseline scenario," the report said. However, if the macroeconomic environment worsens to a severe stress scenario, the ratio may rise to 3.4%. Under the severe stress scenario, the GNPA ratios of PSBs may increase from 3.7% in March 2024 to 4.1% in March 2025, whereas it may go up from 1.8% to 2.8% for private sector banks and from 1.2% to 1.3% for FBs. The <keyword id="20089808" type="General" weightage="20" keywordseo="financial-stability" source="keywords">Financial Stability</keyword> Report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability. The report further said deposit mobilisation by SCBs gathered pace during 2023-24, with a large portion of new accretions in the form of term deposits. "Interest rates became more attractive as banks stepped up efforts to mobilise funds to match the rapid rise in credit demand. Growth in current account and savings account (CASA) accelerated across all bank groups," the RBI said. According to the report, bank credit accelerated during H2 2023-24 among public sector banks (PSBs) and foreign banks (FBs), whereas it moderated in respect of private sector banks (PVBs). The share of credit to the services sector and personal loans in the aggregate loan portfolio increased. Personal loans accounted for over half of PVBs' <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>. The expansion in personal loans was broad-based, led by housing loans and followed by other personal loans.

Banks' gross NPAs at 12-yr low, may fall further to 2.5%: RBI report

The Indian <keyword id="22196321" type="General" weightage="20" keywordseo="credit-card-industry" source="keywords">credit card industry</keyword> is struggling to grow, as new issues slow down on a year-on-year (YoY) basis. Not only has the growth i.e. issuance of new credit cards slowed down, but lenders are also becoming increasingly cautious of the asset qualities, a recent report by Nomura showed. From 19% in July 2024, the growth in the <keyword id="6368202" type="General" weightage="20" keywordseo="credit-card" source="Orion">credit card</keyword> spendings came down to 13% in August 2024. The year-to-date (YTD) growth has also significantly declined in FY25, currently standing at 17%, markedly down from 28% in FY24. For the fifth consecutive month, the number of new credit cards added to the system remained well below the 1-million, or 10 lakh mark. Around 9.2 lakh credit cards were added during the month, a slight uptick from the 7.55 lakh cards that came into the system In July 2024. However, there is growth in this space nevertheless, with about 10.55 crore active credit cards at present, marking a 15.6% YoY increase. Even the annualised spend per card, or the average amount spent via an annual card during an year grew 1% YoY to Rs 1.87 lakh. But this was far less than the 7% growth annual spends via one credit card saw in FY24. Meanwhile, what continues to burgeon consistently is the outstanding amount on these credit cards, which ballooned to Rs 2.7 lakh crore in June 2024, up from Rs 2.6 lakh crore in March 2024, and around Rs 2 lakh crore in the year ago period. To put this in perspective, pre-pandemic, the total outstanding amount stood at Rs 87,686 crore, which marks a 24% CAGR in this amount, in just a span of 5 years. <h2>Large drops, slowdown to sustain</h2>Even the monthly expenditure per card dropped 2% YoY to Rs 16,000 in August, 2024. Subsequently, the transaction volume via credit cards also dipped to 1.6% in August, along with the total amount of <keyword id="21084888" type="General" weightage="100" keywordseo="credit-card-spending" source="keywords">credit card spending</keyword>, which fell to Rs 1.69 lakh crore in August, from Rs 1.73 lakh crore in July. Also, there has been a hefty cutdown in provisions made for credit card reward points, which reflects in the quantum of credit card benefits that have been mowed out by companies of late, making credit cards far less lucrative than before. <h2>HDFC takes lead </h2>During August 2024, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC bank</keyword> added a total of 2.41 lakh credit cards, taking its total tally of active credit cards to 2.19 crore. <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> came a second distant, adding 1.45 lakh credit cards during the month, which means that the second-largest credit card issuer now holds over 1.75 crore active credit cards. Axis Bank and SBI Cards also added 1.27 lakh and 1.1 lakh cards, respectively to their repertoire during the month, while the growth numbers at Kotak Mahindra Bank remained largely flat, stagnating the bank's total card tally at 54.13 lakh. This was due to the ongoing ban on the bank due to its weak IT infrastructural issues imposed by RBI in April 2024. If anything, the bank's number of credit cards declined by 61,191 during the month. Even as the festive season approaches, experts think that it is unlikely to make a major dent in credit card spendings, which are expected to see a further slowdown in the quarters to come.

Credit card growth experiencing a slowdown, as borrowers struggle to pay back loans

<ul class="summary-list"><li>Private lending is now Blackstone's largest business by assets, up 22% since last year.</li><li>COO Jon Gray said it's "very early days" for the burgeoning business.</li></ul>Blackstone made its name buying <a target="_blank" class="" href="https://www.businessinsider.com/blackstone-employee-ownership-program-hvac-company-copeland-kkr-2024-10">undervalued companies</a> and <a target="_blank" class="" href="https://www.businessinsider.com/commercial-real-estate-market-bottom-crash-blackstone-goldman-sachs-2024-3">real estate.</a> But in the third quarter of this year, the company's burgeoning credit arm was the star of the show.In reporting earnings on Thursday, the New York-based buyout firm said its business of cobbling together and investing in loans is now its largest unit by assets. The so-called credit and insurance division boasts assets under management of $354.7 billion, up 22% over last year. By contrast, Blackstone's private-equity business manages $344.7 billion, and its real-estate investing arm, the firm's largest business at the start of the quarter, has $325.1 billion."Today, we manage the largest third-party private credit business in the world," Blackstone's President and Chief Operating Officer, <a target="_blank" class="" href="https://www.businessinsider.com/jon-gray-blackstone-profile-succession-schwarzman-interview-ceo-bumble-oatly-2021-1?r=gray-teaser">Jonathan Gray</a>, said in a call to discuss the firm's financial results. "We have one of the largest, if not the largest, businesses in direct lending, CLOs, real estate debt, and private investment-grade credit," Gray added.Blackstone's private-credit coronation comes as the alternative investments industry increasingly turns toward a growing <a target="_blank" href="https://www.businessinsider.com/private-credit-lenders-middle-market-deals-2023-11">opportunity in non-bank lending</a>. A combination of high interest rates and a <a target="_blank" class="" href="https://www.businessinsider.com/interest-rates-bank-failures-commercial-real-estate-us-economy-outlook-2024-5">banking crisis</a> that has considerably slowed bank lending has increased demand for <a target="_blank" class="" href="https://www.businessinsider.com/jamie-dimon-private-credit-market-risks-retail-investors-debt-investing-2024-5">non-bank loans</a>. Since these lenders often charge higher interest rates, institutional investors are also clamoring to provide capital for these loans to juice fixed-income returns.Blackstone has been tapping into investor demand for private loans in recent months, including what Gray described as a "dramatic increase in demand for all forms of investment grade private credit."Both Gray and Blackstone founder and CEO Steve Schwarzman, meanwhile, seem to think Blackstone's private-credit boom is just getting started."We are building a third-party performing credit juggernaut, and we expect our business to grow significantly from here," Gray said.<h2 id="8b520868-07a0-4e48-a432-8f3b351a93f6">The largest third-party lender</h2>While Blackstone now claims to be the largest third-party credit provider, Apollo is the <a target="_blank" href="https://www.businessinsider.com/apollo-global-management-investor-day-presentation-one-trillion-private-lending-2024-10">largest non-bank lender</a> with $562 billion in private credit assets under management. Apollo has relied on Athene, an insurance company it owns, to lend, while <a target="_blank" class="" href="https://www.businessinsider.com/blackstone-private-credit-investment-strategy-2022-10">Blackstone has focused on investing others' money</a>, forming strategic partnerships with four insurance companies, including Resolution Life, and financial advisory relationships with another 20.Gray expects the insurance industry to continue writing checks to private credit investors, especially in direct lending, a $25 trillion opportunity that's still in "very early days."Gray said that Blackstone's focus on partnering with investors, instead of competing with them by having its own insurance company, will help the business grow."We're not in the market <a target="_blank" class="" href="https://www.businessinsider.com/marc-rowan-profile-ceo-apollo-global-management-leon-black-2021-8">selling annuities</a>," Gray said. "We are a third-party investment manager, and that definitely helps the conversations and helps our momentum here."Gray said the firm sees more pension funds and sovereign wealth clients moving into the space as well."I think over time it's going to move beyond insurance," he said." We're having good dialogue with pension clients. I think we'll see sovereign wealth funds start to do this as well.".Blackstone's private credit arm has generated 16.7% in returns over the last twelve months, though falling interest rates "put some pressure on absolute returns," Gray said. He expects investors to continue to flock to the strategy so long as it can produce returns at a premium to traditional fixed-income investments.<h2 id="c6df9c62-15a3-4bb8-8fe8-7ddacc78d287">"Broad-based acceleration"</h2>Blackstone on Thursday reported distributable earnings, or cash that pays dividends, of $1.3 billion, up 6% over last year — and beating expectations. Total assets under management climbed 10% from last year to $1.1 trillion. The firm's stock price approached its all-time high of $172 a share in midday trading amid what Steve Schwarzman described as a "broad-based acceleration across our businesses."The firm has been making a record number of investments over the last few months, especially in commercial real estate. Blackstone executives <a target="_blank" href="https://www.businessinsider.com/inside-blackstones-real-estate-buying-spree-as-valuations-plummet-2024-5">called a CRE bottom</a> earlier this year, and the company has deployed more than $24 billion into real estate debt and equity over the last twelve months.It's also been investing <a target="_blank" class="" href="https://www.businessinsider.com/blackstone-steve-schwarzman-on-ai-infrastructure-investment-goals-2024-7">big in AI infrastructure</a>, particularly data centers, which will power the artificial intelligence revolution. In September, the firm announced said it would acquire AirTrunk, the largest data center platform in the Asia-Pacific region, in a $16 billion deal alongside the Canada Pension Plan Investment Board.With $70 billion worth of data centers, and over $100 billion of prospective development, Schwarzman said the firm has become "<a target="_blank" class="" href="https://www.businessinsider.com/blackstones-data-center-bets-have-climbed-10-fold-to-100-billion-2024-4">the largest data center provider in the world</a>" in only three years.Opportunities to cash out of investments to drive returns for investors continue to remain sluggish, however. On Thursday, both Schwarzman and Gray said there are plenty of signs that dealmaking is bouncing back, spurred by expectations for lower rates.Gray said the firm's private-equity nondisclosure agreements were up 2.5 times in September compared with the same time last year, suggesting an increase in discussions about potential deals.Gray also predicted <a target="_blank" class="" href="https://www.businessinsider.com/exclusive-omada-health-confidentially-filed-s1-ipo-public-2024-10">growing demand for IPOs</a>, which could help the firm sell some assets and generate returns for its LPs and fees for shareholders and employees.Gray described a meeting he went to this week where the IPO discussion had gone from "theoretical to the practical." Gray said the discussion is now along the lines of, "What's the right size? Should we do it in February or April?"

Inside Blackstone's growing 'credit juggernaut'

<ul class="summary-list"><li><a target="_blank" class="" href="https://www.businessinsider.com/tesla">Tesla</a> stands to benefit from any removal of consumer tax credits on electric vehicle purchases.</li><li>The move could hurt competitors more, CEO Elon Musk said.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> supports a Trump plan to end tax credits of up to $7,500 for electric vehicle purchases.That might sound confusing: Why would the CEO of Tesla want to end a program that makes it cheaper for people to buy EVs?Well, according to Musk, it would devastate Tesla's rivals. And Tesla wants to keep its strong lead in the US EV market, which recently slipped under 50% for the first time."I think it would be devastating for our competitors and for Tesla slightly," Musk said in a July earnings call, predicting the impact of the tax credits ending. "But long term probably actually helps Tesla, would be my guess."On Thursday, Reuters reported that Trump plans to end the EV tax credit, with support from Tesla representatives. In a related post on X, Musk called for an "end all government subsidies, including those for EVs, oil and gas."Tesla has had a longer time than some of its rivals to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-list-government-subsidies-tesla-billions-spacex-solarcity-2021-12">benefit from government subsidies</a>. Its market lead is well established, and it has led an EV pricing war that has squeezed its rivals, making it harder for them to survive if consumer demand falls even further.Put simply: Tesla wins if ending the tax credit pressures smaller rivals enough to stall their growth or even fold.<h2 id="91842e59-2373-4c08-abdd-17185b0bea0d">Tesla sells more EVs than anyone else, and more profitably</h2>In the third quarter of 2024, Tesla <a target="_blank" class="" href="https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q3-2024-Update.pdf">reported</a> a pre-tax profit margin of 18%, well above the industry average of around 9%. Ford, the only competitor to break out its EV-specific finances, <a target="_blank" class="" href="https://s201.q4cdn.com/693218008/files/doc_financials/2024/q3/Press-Release-Ford-2024-Q3-Earnings.pdf">reported</a> a -104% margin for its Model e unit.Yet many of Tesla's vehicles are also priced well below many competitors. The Model 3 starts at $42,490 (after a cheaper option disappeared earlier this year). That's well below the average EV price in the US, which held steady at nearly $57,000 in October, according to Kelley Blue Book data.In an effort to juice sales, <a target="_blank" class="" href="https://www.businessinsider.com/tesla-can-make-cars-cheaper-than-competitors-2024-6">Tesla has drastically cut prices</a> on many of its cars over the past year, instigating an industry-wide price war that has cut into its own margin in pursuit of maintaining its industry-leading market share. Of the nearly 600,000 EVs sold in the US in the first half of 2023, <a target="_blank" class="" href="https://www.coxautoinc.com/wp-content/uploads/2024/07/Q2-2024-Kelley-Blue-Book-Electric-Vehicle-Sales-Report.pdf">half</a> were made by Tesla. Ford, in second place, accounted for just over 7% of EVs sold in the same period."While losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears," Dan Ives, a longtime bullish analyst at Wedbush, told clients in a note on Thursday.<h2 id="c6cefac7-9186-47f8-8f0a-f2fb65808785">Tesla is ahead of the curve in building a US manufacturing presence</h2>Eliminating the <a target="_blank" class="" href="https://www.businessinsider.com/federal-state-electric-car-vehicle-tax-credits-rebates-qualify">consumer tax credit</a>, part of President Joe Biden's Inflation Reduction Act, would need congressional approval. It's not yet clear if Trump and the incoming Republican-controlled Congress would also target other IRA tax incentives, like those supporting domestic manufacturing of cars, batteries, and other components. Competitors like BMW, Honda, and Hyundai have <a target="_blank" href="https://techcrunch.com/2024/07/20/tracking-the-ev-battery-factory-construction-boom-across-north-america/">raced</a> to scale up factories state-side to take advantage of those credits.Tesla has been ahead of this curve in manufacturing, too, with six US factories churning out cars and batteries. That work has paid off, and many Tesla models are regularly named as the most "<a target="_blank" href="https://www.cars.com/american-made-index/">American-made</a>" compared to competitors, many of which rely on factories in Mexico. In fact, only one other American automaker even cracked the top 10 in 2024.Tesla CFO Vaibhav Taneja said in a July earnings call that the company has taken advantage of manufacturing credits, but "we always drive ourselves to say, OK, what if there is no IRA benefit? And how do we operate in that kind of an environment? Like Elon said, we definitely have a big advantage as compared to our competition on that front."In October, the Alliance for Automotive Innovation, an industry group representing Ford, GM, Honda, Toyota, and others, <a target="_blank" href="https://subscriber.politicopro.com/article/2024/11/auto-trade-group-to-gop-tax-writers-keep-bidens-ev-credits-00189430">urged</a> Congress to keep the tax credits.The tax credits, including those for commercial leasing and manufacturing, are "critical to cementing the US as a global leader in the future of automotive technology and manufacturing," they said in an October letter to Congress published by <a target="_blank" href="https://subscriber.politicopro.com/f/?id=00000193-277d-dea7-afbb-b77f708f0000">Politico</a>.The group, which does not include Tesla, did not respond to a request for comment. A spokesperson for the Trump transition team did not respond to a request for comment.While Musk supports cutting the EV tax credit, reports of its potential demise appear to have spooked investors. Tesla shares fell about 5% following the Reuters report, while Rivian shares fell 11%.Musk and other Tesla leaders have long said autonomous vehicles are the future of Tesla, not just EVs, and encouraged potential investors to think much more long-term.Additional reporting by Benjamin Zhang.

Why Musk supports Trump getting rid of EV tax credits

<ul class="summary-list"><li>If you've gotten really into credit card rewards in recent years, you're not alone.</li><li>Some Americans go to great lengths to maximize points, sign-up bonuses, and cashback.</li></ul>Aaryan Desai picked up a hobby during quarantine: <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/best-credit-cards">researching</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/transferable-credit-card-points-best-rewards-to-earn">credit card</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/ways-to-use-credit-card-points-beyond-travel">rewards</a>.The 20-year-old swipes as much as he can. Right now he's <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/how-to-book-free-travel-cheap-deals-credit-card-rewards">banking points</a> for a concert in October and a big trip after he graduates from Georgia Tech.Desai is part of a new generation of credit card users: young, perks-focused, and ready to maximize. Today's credit cards, he said, are like the coupon books of yore. The perks might not always be the right fit, but, if you figure out a good configuration, you can find some big savings.For Desai and other <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">rewards hounds</a>, the realization that they can perform a sort of points arbitrage was a real hook."Just using the money that I would be using otherwise or just getting together with friends and that, 'hey, I can just put it on my card and you can Venmo me later,' opening the door to getting 80,000 points from Chase or 175,000 from American Express — it was a new opportunity," he said, adding: "That's what got me into it."If it seems like the whole country suddenly has credit card point mania, you would be correct: An <a target="_blank" href="https://www.ipsos.com/en-us/majority-americans-value-their-credit-card-rewards">Ipsos poll</a> of 1,081 adults conducted from April 31 to May 1 found that 71% of respondents have a rewards or cashback credit card, and 68% said that they prefer using their credit card because of the rewards and points that they can earn.The poll found that a fifth of Americans ages 18 to 34 use their rewards to pay for things they wouldn't be able to afford otherwise. Younger Americans are flocking to previously fancy cards like <a target="_blank" href="https://www.businessinsider.com/american-express-platinum-card-gold-gen-z-millennial-rewards-2024-6">American Express</a>, willing to shell out hefty annual fees in exchange for perks like <a target="_blank" href="https://www.coachella.com/amex">exclusive access to Coachella tickets</a>.The rewards are a big reason <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">credit cards</a> have become a cultural juggernaut among young Americans. As costs rise and <a target="_blank" class="" href="https://www.businessinsider.com/millennial-subsidy-uber-airbnb-prices-surge-pricing-dynamic-2024-8">the millennial subsidy fades</a>, credit card rewards help a new generation live lifestyles they may not otherwise be able to afford: first-class flights, hotel rooms, and VIP concert experiences. It doesn't hurt that social media is full of videos and blogs that offer the tantalizing promise of free trips, luxury lounges, and fancy restaurants — if you can cobble together the right puzzle of points and cards without digging yourself into too much debt.<h2 id="124d8b83-ad11-40eb-84a1-249d4ffa65bd">Living the high life on credit card perks</h2>At first, 29-year-old Willem Van Eck thought the rewards game was a snake oil salesman's gambit. Cut to: He's stretched out in a first-class seat, a glass of bubbly in hand."Wow," he thought, "this actually is a scheme that you can leverage with the right flexibility and with the right research," Van Eck, a software engineer in the Bay Area, said.Credit card rewards work as an incentive to get customers to swipe more. They can come in the form of cashback — which means you get a partial refund for a given purchase in the form of a credit on your bill or a transfer to another account. Or they come as points, which are more nebulous but can typically be used as currency for future purchases. And then there are other perks like hotel credits, airline miles, gift cards, and upgrades like Van Eck's.For instance, the Platinum Card from American Express — often considered one of the <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/chase-sapphire-reserve-vs-amex-platinum-card#fees">top cards for rewards</a> — will cost you $695 in annual fees. In return, you'll get five points for every dollar spent on flights and a point for every other dollar spent. On average, <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/what-are-points-miles-worth-value#amex-membership-rewards">per BI's calculations</a>, an Amex point is worth 1.8 cents. Say you spend $5,000, $2,500 of which went toward flights; you'd net 15,000 points, which could equal around $270 — a significant chunk of the annual fee.In addition, many cards will also offer substantial sign-up rewards. The Platinum Card offers 80,000 points for spending $8,000 in the first six months of holding the card. Those 80,000 points alone could be worth twice as much as the annual fee.Taking advantage of this system requires diligence and restraint to avoid paying more in interest and fees than you gain in rewards. According to <a target="_blank" href="https://www.federalreserve.gov/econres/feds/files/2023007pap.pdf">a paper</a> looking at who this system hurts and benefits, borrowers who carry balances and businesses — which pay a fee on each credit card transaction — subsidize the fun for the rest of us.Pre-pandemic, Van Eck was chasing cards with high sign-up bonuses, like the Chase Sapphire Preferred card, because they allowed him to transfer points to airlines so he could book business or first-class seats. During the pandemic, he took note of the <a target="_blank" href="https://www.wsj.com/articles/airline-cards-lose-luster-as-coronavirus-persists-11606991400?mod=article_inline">beefed-up bonuses and short-term benefits</a> that companies were offering in an attempt to lure customers; his Delta card offered a $15-a-month dining credit, for instance. That's when Van Eck noticed that more of his Gen Z and millennial friends starting to become adept at navigating their benefits.Van Eck is very cautious of lifestyle creep and ensuring that cards are worth his while, especially amid high interest rates, inflation, and recessionary fears."I've seen most of my peers, including me, reevaluate the value proposition of the cards," he said. Every year, he goes through his list of cards to see which ones paid for themselves without him changing his behavior. If one doesn't, he'll cancel it.But not everyone is as prudent as Van Eck. In the high-paying tech industry where he works, Van Eck still sees people changing their habits to maximize rewards, which he doesn't think is smart. This could be why delinquencies have been on the rise in recent years, with the youngest borrowers leading the pack. After all, credit cards are fun to use. No, really. Contrary to the belief that we overconsume with credit cards because they ease the pain of spending, <a target="_blank" href="https://mitsloan.mit.edu/experts/how-credit-cards-activate-reward-center-our-brains-and-drive-spending">research finds</a> that their bigger appeal is that they make our brains feel like we're getting a reward. All that stands between you and access to that first-class airport lounge are a few taps or swipes.<h2 id="0f454fca-2571-4637-a3e5-c54130cda971">Nothing good lasts</h2>Credit card companies aren't just giving away rewards for free.As Lulu Wang, an assistant professor of finance at Northwestern's Kellogg School of Management <a target="_blank" href="https://insight.kellogg.northwestern.edu/article/who-pays-generous-credit-card-rewards#">finds</a>, many businesses will pass on their costs to customers. For example, say you use a 1% cash back rewards credit card at your favorite local coffee shop on $100 worth of coffee for you and your friends. The shop pays a 2% fee on the transaction — $2 — to your card issuer. Then, your card issuer would use some of that 2% fee to give you your 1% back. To cover their fee, the shop might raise their prices."In some sense, when you benefit from those rewards, you're taking that money from some mix of the merchant and other cash and debit card consumers out there in the economy who are then not benefiting from those rewards," Wang said.Perks aren't always a great deal for everyone. Will Springer, a 41-year-old in Indiana, uses his Chase Sapphire Preferred and Amex Platinum cards primarily for perks like travel insurance and car rentals. Since he lives in a more rural area, an Equinox gym membership benefit is moot, and he can't really use the Uber benefit offered — he sometimes converts it into food delivery credit for Uber Eats.Other loyal credit card point users say you can't bank on your favorite perks sticking around. Brandon Zemel, a 32-year-old music producer in Las Vegas, puts pretty much everything on a credit card. He has two cards, the Chase Sapphire Reserved with a higher annual fee that's more travel-catered, and the Chase Freedom Unlimited, which has a fairly flat return on points. He said his travel card shaves hundreds of dollars off of his expenses, and he loves to use his points to get himself onto seat upgrade lists.But Zemel recently lost a hugely useful travel benefit: a "<a target="_blank" href="https://www.forbes.com/advisor/credit-cards/chase-sapphire-reserve-card-ending-priority-pass-restaurant-benefit/">priority pass</a>" that could be converted into a $28 dining credit for both him and a guest."It seems to be a thing these days that every year, two years, three years, these companies devalue their product or their perks provided by their product," Zemel said. "And I guess to some extent it's to be expected, but it does kind of remind you that the things that you currently enjoy are not necessarily going to be here long term."As Zemel has seen during his time as a cardholder, the rewards craze has basically "grown exponentially," propelled by popular blogs and TikTokers. That can also dim the appeal of previously exclusive perks, like overcrowded airport lounges."People got really used to anyone with a pulse basically having some kind of access to the lounge at the airports," he said. Now, Delta has <a target="_blank" href="https://www.cnn.com/travel/delta-ceo-bastian-skymiles-changes/index.html">recognized</a> that it had too many elite cardholders — leading it, in some cases, to restrict access to <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/delta-sky-club-credit-card-access">lounges</a> to higher spenders.It's what Wang says is an example of "<a target="_blank" href="https://www.huffpost.com/entry/what-money-cant-buy_b_1442128">skyboxification</a>" — an increasing stratification of life among haves and have-nots, like a baseball stadium that's divided between crowds in the stands and richer fans in box seats."I can totally understand this looming dread that society is getting splintered into those who have access to this kind of stuff and those who don't," Wang said.I can relate to this sentiment. At a music festival this summer, I learned that my Chase Sapphire credit card would let me skip the line and access an air-conditioned tent with free water.However, when I arrived I learned a hard truth: I actually needed the card one tier above mine to get in. For one brief moment, as I gazed at the sparse crowd inside, I thought about applying on the spot. But I ultimately decided it wasn't in my best interest to incur a higher annual fee and open another line of credit.And yet, as I stood among the packed and sweaty masses, waiting nearly an hour to get food and water, I felt haunted by the skybox appeal. Would a new credit card do anything positive for my finances? Most likely not. Would it make me feel like a VIP at this event? Definitely. Maybe I'll try to get the Sapphire Reserve before next year's festival.Are you passionate about your credit card rewards? Have you gotten into debt trying to play the points game? Contact this reporter at <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a>.

Welcome to credit card points mania

The <keyword id="21570567" type="General" weightage="100" keywordseo="credit-offtake" source="keywords">credit offtake</keyword> continued to grow at the rate of 13.9% year-on-year to reach Rs. 168.1 lakh crore for the fortnight ending July 12, 2024. However, the pace of growth was slow, a Care Edge report said. Credit offtake is a type of <keyword id="19946069" type="General" weightage="20" keywordseo="bank-credit" source="keywords">bank credit</keyword> that assists businesses in getting financing for future projects. The credit offtake increased by 14.0% year-on-year, but declined by 0.4% sequentially for the fortnight ended July 12, 2024. Over the last twelve months, credit offtake expanded by Rs. 20.4 lakh crore. The report attributed the sluggishness to the higher base effect and banks' focus on restraining the credit-to-deposit (CD) ratio. <keyword id="20218853" type="General" weightage="20" keywordseo="deposits" source="keywords">Deposits</keyword> grew by 11.3 % year-on-year for the fortnight, including the impact of the HDFC merger, reaching Rs. 211.8 lakh crore, driven by growth in time deposits. "The <keyword id="20575555" type="General" weightage="20" keywordseo="credit-to-deposit" source="keywords">Credit to Deposit</keyword> ratio stood at 79.4 % for the fortnight (July 12, 2024). Meanwhile, if we study the credit and deposit inflows over the past 3 months and 6 months, we can observe that credit offtake has lagged the deposit growth numbers. Hence, the <keyword id="20048508" type="General" weightage="20" keywordseo="CD-ratio" source="keywords">CD ratio</keyword> derived from these flows from January would be around 70% and from March would be approximately 54%," the report added. The report added that going forward, bank credit offtake could face challenges, and is likely to be tepid for the entire year. Inflows over the past three and six months show credit offtake at 5.3% for six months and 2.3% for three months, lagging behind deposit growths of 6.0% and 3.4% respectively. Deposits rose by 11.3% year-on-year for the fortnight, but declined by 0.5 % sequentially. In absolute terms, deposits expanded by Rs. 23.9 lakh crore over the last twelve months. The report anticipated that the deposit is expected to be strong in FY25, as banks focus on strengthening their liability franchise, sourcing funds through certificates of deposit, despite higher costs. As per the data in the report, the absolute growth in credit offtake was Rs. 8.4 lakh crore for six months, and Rs. 3.8 lakh crore for three months, lagging behind deposit growth of Rs. 11.9 lakh crore and Rs. 7.0 lakh crore for the same periods. The CD ratio has floated around 80 % since September 2023, standing at 79.4 % for the fortnight ending July 12, 2024, as per the report.

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