Use of credit cards increased in the month to Sept 22 by 27.12% to 380,388, according to data released by Shaparak Company, the state body in charge of supervising the national e-payment network.
The total number of active bank cards during the month also posted a growth of 2.7% from 118.8 million to 121.9 million cards, comprising largely of debit cards.
Debit cards still top the list of bank cards -- 95.28% or 116.2 million. Active bank cards registered 2.54% growth compared with the month before. Shaparak said 5.37 million gift cards were used at least once during the month, up 4.3% compared to the month before.
Credit cards are still not the norm in Iran and for long were limited to VIPs. But now that seems to be changing. The Central Bank of Iran policy of promoting credit cards as an instrument for microloans is influencing banks' decision to rethink.
Last month, the CBI increased credit card limit by four times allowing banks to offer up to 2 billion rials ($8,000) in credit, in line with efforts to promote credit use.
Credit cards should gradually replace microloans, the regulator said. "Credit cards have the potential to help curb demand for loans from banks, raise the efficacy of loans and ultimately allow the people from all social strata to access the resources of banks.”
Banks offer only one credit card to each customer, though customers can hold credit cards from multiple banks so long as the maximum credit does not exceed 2 billion rials.
Card holders do not pay interest if they clear their debt within the agreed period. If not, they are given 12-36 months to settle their bills at 18% -- the rate cap set by the Money and Credit Council.
The CBI devised measures in previous years to persuade lenders to issue credit cards, However, it failed mainly because of private bank's reluctance to get involved in the credit card business for hitherto unknown valid reasons.
Shaparak figures confirm private banks' aversion to offering credit cards. Bank Melli Iran, owned by the government, solely accounted for 64% of the credit cards used in the month to Sept 22.
Bank Sepah, also government-owned, was next with 13% share followed by Bank Mellat at 8.5% share and Post Bank Iran 4.41% share of the total credit cards.
Saman Bank topped the list of private bank in terms of credit cards by the end of September accounting for 1.2% of the total.
