The Reserve Bank has issued a directive instructing banks to provide eligible customers with the option to select from multiple card networks when issuing credit or debit cards. This move aims to enhance flexibility and choice for card users. Additionally, the central bank has prohibited credit card issuers from entering into any agreements that restrict customers from accessing services offered by other networks.
In a circular, the Reserve Bank highlighted the importance of offering customers the freedom to choose their preferred card networks. It emphasized the need to eliminate arrangements that limit customer choice and promote competition in the payment system.
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Existing cardholders will have the option to choose from multiple card networks during the next renewal process. The directive applies to authorized card networks such as American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte Ltd, National Payments Corporation of India, Rupay, and Visa Worldwide Pte Limited.
Card issuers and networks must ensure compliance with the RBI’s guidelines in all existing agreements, amendments, renewals, and new contracts. However, the directive exempts credit card issuers with fewer than 10 lakh active cards and those issuing cards on their own authorized networks.
The Reserve Bank has set a deadline of six months from the circular’s issuance date for implementing the directive. This initiative aims to promote competition, transparency, and consumer choice in the credit and debit card market, ultimately benefiting card users nationwide.
