"Credit is a devil that dances in empty pockets," was the advice P.V. Rajiv's father gave him when the young salesman swiped his new credit card for the first time to buy an expensive watch he could hardly afford.

As someone whose generation was brought up on the virtue of thrift, Rajiv's father did not understand the culture of unfettered consumerism that has been one of the engines of India's stunning economic growth.

If Rajiv couldn't pay up front for a purchase, he used his card, until he exhausted his credit limit about six months ago.

"The outstanding is so high now that I am hardly able to pay the minimum due," said the 26-year-old, once the quintessential ambitious customer every bank targeted, hoping the offer of a credit card or loan for that dream car would prove irresistible.

With India's growth, an average of 8.6 per cent in the last four years, matched only by an expansive embrace of debt-fuelled consumerism among its growing middle-class, the country was a magnet for retail lenders.

But now as the global slowdown hobbles India's growth, while interest rates are still high, banks, companies and consumers are feeling the strain of rising debt.

According to latest central bank data, consumer credit growth in August slowed to 17.4 per cent from 21.4 per cent a year ago.

Housing loan growth slowed to 13.9 per cent in August from 17 per cent last year, while advances for consumer durables fell by 7.9 per cent from a year ago.

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