Pralay Mondal, country head retail assets and credit cards, HDFC bank said that around 30-35 percent of the credit card loans are bad. He refused to comment on HDFC's delinquency rate but said that it was less than half of the industry numbers.

HDFC, the largest mortgage lender has 4.5 million cards that accounts for 18 percent of the total credit card market. Other players in the credit card industry include ICICI bank, SBI cards, Citibank, Standard Chartered.

ICICI banks head of retail assets, Vijay Chandok said that he could not comment on the default rates of the bank or the industry.

Banking analysts say that the credit card industry is beginning to stabilise. A banking analyst with a research firm said that the delinquency figure could not be 30-35 percent. He said that the figure should be around 10-20 percent for most of the banks and if at all the figure is high it might be because of the fraudulent transactions which customers do not pay for.

HDFC bank said that it had managed to put a check on its default rates by being careful about whom it was issuing cards to and cutting sales from external agencies. Mondal said, "We were conscious about the customer. We didn't ride the cycle. About 50% of the cards are held by internal customers (account holders). We churned the portfolio. We have never come in and come out of the market. We have always been there."

Other credit card firms have also become wary of payment defaults. The credit card companies that earlier fought for higher market shares in terms of number of cards disbursed and offered free credit cards are now concentrating on fee-based cards.