RBI’s new guidelines allows customers to choose from multiple card networks
The Reserve Bank of India (RBI) has issued new guidelines directing card issuers not to enter into arrangements or agreements with card networks that restrict them from using the services of other card networks. The central bank emphasized that card issuers must provide eligible customers with the option to choose from multiple card networks at the time of issuance.
Key points from the RBI’s directive:
1. No restrictive agreements: Card issuers are barred from entering into agreements that prevent them from availing services from other card networks.
2. Customer choice: Card issuers must offer eligible customers the choice to select from multiple card networks at the time of card issuance. For existing cardholders, this option should be provided at the time of the next card renewal.
3. Authorized card networks: The authorized card networks specified by the RBI include American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited.
4. Exclusions: The directives do not apply to credit card issuers with fewer than 10 lakh active cards.
5. Implementation deadline: The directive regarding customer choice at the time of issuance will come into effect six months from the date of the circular.
The RBI aims to ensure more choice and flexibility for customers in the issuance and usage of credit cards. The move is in response to observed arrangements between card networks and issuers that were limiting customers’ options. By allowing customers to choose from multiple card networks, the RBI seeks to enhance competition and promote a more customer-centric approach in the credit card industry.
