RBI Asks Banks To Give Customers Option To Choose From Multiple Card Networks
Card issuers have also been asked not to enter into any arrangement with card networks that would stop them from availing the services of others.
The Reserve Bank of India directed card issuers on Wednesday to give customers the option of choosing from card networks.
From now on, banks and non-banks that issue credit cards will have to provide an option to customers to choose from multiple card networks. This option would be given at the time of issue.
However, for existing card holders, this choice may be given at the time of renewal.
Card issuers have also been asked to not enter into any arrangement with card networks that would stop them from availing the services of others.
This directive comes into effect from Sept. 6, 2024, according to the RBI.
For this, the RBI has also listed names of authorised card networks. These include American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte., National Payments Corp.–Rupay, and Visa Worldwide Pte. Ltd.
The step comes after the RBI observed some arrangements between card networks and card issuers. These arrangements were not conducive to the availability of choice for customers, while picking from card networks.
The rules, however, would not be applicable to credit card issuers with number of active cards issued being 10 lakh or less. It also excludes those card issuers who issue on their own authorised card network.
In July 2023, the RBI placed a draft circular in this regard for feedback from stakeholders. It also mandated banks and non-banks to issue cards on more than one card-network along with providing customers the option to choose from multiple networks.
