The Reserve Bank of India (RBI) said in a circular that on review it was found that some of the arrangements existing between card networks and card issuers are not conducive to providing choice to 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 the card networks that prevents customers from availing the services of other networks.
The Reserve Bank of India (RBI) said in a circular, ‘Upon review, it was found that some of the arrangements existing between card networks and card issuers are not conducive to providing choice to customers.’
RBI has given these important guidelines.
The central bank said, ‘In such a situation, it is directed that the card issuers will not make any such arrangement or agreement with the card network which prevents the customers from availing the services of other card networks. .” RBI said that for existing cardholders, this option can be given at the time of next renewal of the card.
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 adherence to RBI guidelines in existing agreements at the time of amendment or renewal and while executing new agreements.
However, this instruction will not be applicable to those credit card issuers whose number of active cards issued by them is 10 lakh or less. Apart from this, institutions issuing credit cards on their own authorized card networks have been excluded from the instructions of this circular. According to this, the instructions to give eligible customers the option to choose from multiple card networks will be effective for six months from the date of issue of the circular.
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