Credit Card News: RBI has said in its order that card issuers are not allowed to enter into any agreement with the card networks.
RBI has said in its order that card issuing banks are not allowed to enter into any agreement with the network, which hinders them from accessing the services offered in other card networks.
The Reserve Bank of India (RBI) has taken a big decision for credit card customers on Wednesday (6 March). RBI has given new guidelines with the aim of providing more options and flexibility to the customers. The Reserve Bank said that card issuing banks should allow customers to choose from the card network at their own discretion.
RBI has said in its order that card issuers are not allowed to enter into any agreement with the card networks. The Reserve Bank has taken this decision so that customers get the opportunity to avail the services provided by other card networks. This direction is in response to the RBI’s observation that the existing arrangement between card networks and issuers limited the options for customers. Are happening.
What freedom will we get now?
The new guidelines of RBI will benefit the new customers as well as those customers who are currently using the card. This allows them to use this option at the time of their next card renewal.
Through these instructions, RBI aims to create an environment where customers have more say in the selection and use of credit cards. RBI said in its order that card issuers and card networks will be required to comply with the new orders in both existing agreements and new agreements at the time of amendment or renewal.
To ensure clarity of card choice for customers, RBI has introduced authorized card networks as American Express Banking Corp, Diners Club International, MasterCard Asia/Pacific, National Payments Corporation of India-Rupay and Visa Worldwide. However, RBI clarified that this instruction issued by them will not be applicable to credit card issuers with less than 10 lakh active cards. Additionally, issuers that issue credit cards on their own authorized card networks have been exempted from this circular.
