Mumbai: The Reserve Bank of India (RBI) on Wednesday unveiled fresh directives aimed at offering increased choices and flexibility to credit card users.
The central bank emphasised that card issuers are obligated to offer eligible customers the opportunity to select from a variety of card networks during the issuance process. It also specified that card issuers are not allowed to enter into any agreements with card networks that restrict them from accessing services offered by other card networks. “On a review, it is observed that some arrangements existing between card networks and card issuers are not conducive to the availability of choice for customers,” the RBI said in a circular.
For current cardholders, this choice to select from various card networks can be offered during the subsequent renewal process, as specified by the central bank.
American Express, Diners Club International, Mastercard, Visa, and the indigenous RuPay are the networks that offer services to customers in India. However, the selection of the provider is typically predetermined by the bank based on the issued card.
Nevertheless, the RBI clarified that these guidelines do not extend to credit card issuers with less than 10 lakh active cards.
Furthermore, issuers who issue credit cards on their own authorised card network are exempt from the circular’s scope of applicability.
RBI further stated that both card issuers and networks must ensure compliance with the central bank’s guidelines in existing agreements during any amendments or renewals, as well as when entering into new agreements.
“Currently, customers are required to send a letter to ask for a switch in card network. Now, that choice will become mandatory for issuers to offer at the time of issuance and renewal,” said a banker with a private bank.
These regulations were initially slated to be enforced starting October 2023. However, the RBI has granted players an additional six months’ grace period due to some players’ non-compliance with the directives.
