Reserve Bank of India (RBI) said in a circular that on review, it was found that some of the arrangements existing between the card networks and card issuers are not conducive to providing choice to the customers.
Mumbai. The Reserve Bank has directed banks to provide eligible customers the option to choose from multiple card networks while issuing credit or debit cards. The central bank has also asked credit card issuers not to enter into any agreement or arrangement with card networks that prevents customers from availing the services of other networks.
The Reserve Bank of India (RBI) said in a circular, ‘On review, it was found that some of the arrangements existing between card networks and card issuers are not conducive to providing options to customers.’
RBI gave these important guidelines
The central bank said, ‘In such a situation, it is directed that card issuers will not enter into any such arrangement or agreement with the card network that prevents customers from availing the services of other card networks.’ RBI said that this option can be given to existing cardholders while renewing the card next.
American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte Ltd, National Payments Corporation of India-RuPay and Visa Worldwide Pte Ltd are listed as card networks. According to the circular, card issuers and networks will have to ensure compliance with RBI guidelines in existing agreements at the time of amendment or renewal and while executing new agreements.
However, this directive will not apply to those credit card issuers whose number of active cards issued is 10 lakh or less. Apart from this, institutions issuing credit cards on their own authorized card network have been excluded from the instructions of this circular. Accordingly, the instructions to give eligible customers the option to choose from multiple card networks will be effective for six months from the date of issuance of the circular.
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