Rising defaults stop banks' credit card onslaught

By Gopika Gopakumar and Pooja Meswani, CNBC-TV18

Have you noticed that over the last couple of months those pesky phone calls to give you credit cards have just stopped? That's because banks are now not so keen to give you credit cards any more. Not so long ago, banks did all they could to give you credit cards, now things have changed. Rising defaults have made cards a high risk business and that's made banks slow down their credit card expansion.

Axis Bank, for instance, will not give you a credit card unless you have an account with the bank. This is after the bank's NPAs are up 27% this year because of higher credit card defaults. It's not very different for other banks either. SBI cards is expected to chalk up NPAs of about 16% this year and with around 3.1 million credit card holders, the bank is now largely targetting SBI customers only.

HDFC Bank says this has always been its policy tapping its own pool of 4.1 million customers  to sell  credit cards but this bank too has raised rates on credit card overdrafts sharply, in a bid to reduce risks. ICICI Bank, the dominant player in the card market is the only one for whom it's business as usual. Bank officals say they are expanding their credit card base by targetting other bank's customers as well. But ICICI Is the exception, others banks are clearly getting very choosy with their credit card customers.