Credit controls put in place by card companies in the wake of rising delinquency levels have also meant that spending through credit cards fell by 7.85 per cent to Rs 5,171.06 crore (Rs 51.71 billion) in January 2009, as against Rs 5,611.38 crore (Rs 56.11 billion) during April 2008. In contrast, spending had gone up by 28 per cent during the corresponding period last year.

According to RBI data released earlier, the combined credit card outstanding went up by almost 70 per cent in the last one year. The outstandings rose to Rs 29,359 crore (Rs 293.59 billion) at the end of December 2008 from Rs 17,306 crore (Rs 173.06 billion) in the corresponding month of 2007. The numbers indicated that many card holders were rolling over credit.

"It may be partly due to the fall in card population, but the average spend is also coming down," the retail banking head of a large private bank said.

"Due to the economic downturn, people are restricting unnecessary spending," a public sector bank executive added.

"Consumer spending on almost all fronts has come down and there has also been a lot of culling in the industry," Sujan Sinha, senior vice-president for retail banking at Axis Bank, said. Banks have also reduced the total number of credit cards in circulation by 282,000 during January to check losses arising from the portfolio.

According to latest data released by the Reserve Bank of India, the credit card population fell by 8.62 per cent to 25.87 million at the end of January this year, as against 28.31 million at the start of the financial year. This is in contrast to April-January 2007-08, when the number of credit cards rose by 13.32 per cent.

"Credit cards of marginal customers and defaulters have been cancelled, and credit appraisal mechanisms have also become more elaborate. NPAs for almost all players in the industry have risen," Axis Bank's Sinha said.

Standard Chartered Bank's country head for retail banking Shyam Srinivasan said that his bank had seen a more or less flat credit card population and did not intend to step up activity given the present economic situation.

With non-performing assets in the card segment rising to over 20 per cent for some banks, as against 5-6 per cent during the last financial year, card issuers are more content dealing with people who pay their bills on time.

For instance, in case of SBI [Get Quote] Cards, NPAs were estimated to 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, and its card base shrunk from 3.4 million to 3 million in the last six months. When contacted, SBI Cards refused to comment.