The Reserve Bank of India (RBI) said card issuers should not enter into any arrangement with card networks which restrain them from availing services of other card networks.
The RBI also said that card issuers need to provide an option to their eligible customers to choose from multiple card networks at the time of issue.
This option may be given to existing cardholders at the time of the next renewal, the RBI said after it observed that some arrangements existing between card networks and card issuers are not conducive to the availability of choice for customers.
Through the guidelines, RBI aims to ensure more choice and flexibility for customers in issuance and usage of credit cards, it said, adding that some arrangements between card networks and issuers were limiting customers’ options.
The RBI directed the following:
- Card issuers are barred from entering into agreements that stop them from availing services from other card networks.
- Card issuers must offer eligible customers the choice to select from multiple card networks when the card is being issued.
- In case of existing cardholders, this option will be provided at the time of their next card renewal.
As per the directive, the following are the authorized card networks — American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India–Rupay and Visa Worldwide Pte Limited.
The directives do not apply to credit card issuers with fewer than 10 lakh active cards.
The directive regarding customer choice at the time of issuance will come into effect six months from the date of this circular, RBI said.
Source: Hindustan Times
