Indian banks have issued over 16 million new debit cards during the height of the Covid-19 lockdown, a report by Economic Times said.
These cards were issued at a time whenthe demand for contactless cards during the pandemic ramped up.
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It coincides with the country’s banking regulator urging banks to replace the old magnetic stripe cards with the new contactless variant to facilitate contactless payments.
According to bankers and payment experts, the move by the central government to expand the coverage of various relief schemes linked to Jan Dhan bank accounts may also have pushed the demands.
The beneficiaries needed functional cards to access the accounts.
A public sector banker told the publication: “The pandemic has brought in better use case scenarios for digital payments, where we issued a lot of debit cards to new customers opening bank accounts to access government payments.
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By GlobalData“Some of it was also to customers who upgraded to chip and PIN cards as we migrated from magnetic stripe cards.”
The latest Reserve Bank of India data noted that the number of debit cards in circulation increased to 845.4 million in June from 828.5 million at the end March.
According to the data, the circulation of cards issued by state-owned banks increased to 597.1 million from 585.6 million, even when operations at branches were affected by the nationwide lockdown.
In the same period, private sector banks issued about four million cards, with their circulation spiralling to 168.6 million.
The remaining cards were issued by foreign banks, small finance banks and payment banks, the report added.
The banks have been replacing the old magstripe-based debit cards with the chip-based EMV cardssince September of 2018.
