Sandeep Bhalla, business manager (cards), Citibank India, said the industry grew at a breakneck speed of 30-40 per cent in the past. But the recent growth had been limited to 5-10 per cent due to several issues such as NPAs and liquidity crunch. Card issuers have been forced to reassess their business models, he said.

Consider the facts: The combined credit card outstandings have gone up almost 70 per cent in the last one year, according to central bank data. The outstandings have gone up to Rs 29,359 crore (Rs 293.59 billion) in December-end from Rs 17,306 crore (Rs 173.06 billion) in the corresponding month of the previous year.

Similarly, the NPA numbers are quite alarming. The average NPA for the industry is at 15-16 per cent. This is an increase of about 60 per cent in one year, said R L Prasad, general manager and head (cards and personal loans), Standard Chartered Bank.

SBI [Get Quote] Cardss NPA was 21.22 per cent as on September 30, 2008, according to rating agency Icra. To tackle this, the company has opted for foreclosures and settlements. The card base is down from 3.4 million to 3 million in the last six months.

SBI Cards CEO Diwakar Gupta said a year ago, 75,000 cards were being issued per month. The number has fallen substantially, he said  Also, the number of cities where the cards are being issued is down from 115 to 35. Some other banks are restricting themselves to only the six metros.

Some credit card companies have started cutting down on new card issuances by almost 70 per cent. Companies have become more careful about the quality of borrowers, Vibha Batra, vice president and co-head, financial sector ratings, Icra, said.

Among other measures, the basic qualifying parameters have been tightened. The threshold salary  limit has been hiked from Rs 8,000-10,000 to Rs 20,000-30,000. Bankers said that they were more comfortable with customers with a higher salary base.

Multinational banks have gone a step ahead and have prescribed the minimum salary requirement at Rs 10 lakh a year. A senior banker justified this by saying customers in the lower salary bracket were prone to financial mismanagement.

The past borrowing history, credit record, permanent residence landline, existing investments, among others are also being scrutinised more carefully. Even the number of cards could become an issue.

More importantly, banks have stopped depending on direct selling agents and websites that pass on leads on new customers. Instead, they are opting for cross-selling to their existing clientele.

Since mid-December, all private card issuers have stopped taking customer leads from us, said Satkam Divya, chief executive officer, Rupeetalk.com, an online portal that generates leads for banks. Just three months back, Rupeetalk was sending more than 100,000 leads per month.

For existing clients, there are a lot of stringent guidelines. Stories of credit limits or cash being slashed are common. In fact, some companies are even contemplating cancelling the credit limits for weaker credit profile borrowers, Icras Batra said.