Banks, both private and state-owned lent aggressively to retail customers encouraged more by a falling interest rate scenario. But with the global financial crisis and a squeeze on domestic liquidity, most banks, including the country’s largest private bank ICICI Bank have consciously started tempering down their retail operations. Fearing defaults, they have become more cautious on all kinds of consumer finance and retail loans, especially two-wheelers, personal and credit card loans.

Sure enough, incessant calls from bank executives and direct selling agencies pestering you for a new credit card or to have the credit limit on your existing card raised have almost ceased.

No longer do you find yourself being asked to fill out a credit card invoice form at the petrol pump so they can charge it to your card. In case you are planning a shopping trip abroad, your bank may not be too comfortable with the idea. Manhattan Bank is sending out warning e-mails to all its users asking them to inform them about any plans of going abroad and using their credit card there beforehand.

A bank executive told The Indian Express that they are conducting thorough bi-annual reviews of the credit history of their card users and are diligently revising downwards the credit limits of those with even slightly problematic histories. Many bankers admitted they have become more cautious while giving out personal loans.

According to the Reserve Bank of India, the number of credit cards circulating in the country fell by about 1.5 million in the first five months of the current financial year to 26.73 million. Credit card debt, however, does not account for a significant percentage of total bank credit in the economy (just over 1 per cent). But in light of the current crisis, bankers believe they have no option but to resort to such penny pinching.