Thursday, May 30, 2024
HomeNewsReserve Bank of India Empowers Credit Card Customers to Choose Payment Networks

Reserve Bank of India Empowers Credit Card Customers to Choose Payment Networks

In a significant update, the Reserve Bank of India (RBI) has mandated banks to offer customers the freedom to select from multiple card networks for their credit cards. Effective immediately, both banks and non-banking entities issuing credit cards are required to provide customers with the option to choose their preferred card networks upon card issuance. RBI’s directive prohibits any agreements that restrict customers from accessing services offered by other card networks. The approved card networks specified by RBI include American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte, National Payments Corporation of India-Rupay, and Visa Worldwide Pte.

RBI’s Directives:

Under the new guidelines, card issuers are barred from entering agreements that limit customers’ access to services provided by other card networks. Eligible customers must now be offered the choice to select from multiple card networks during the issuance of cards. Additionally, existing cardholders will be granted this option during their next card renewal.

Reasoning behind the Initiative:

This initiative by RBI follows an examination of existing arrangements between card networks and issuers, which were found to hinder customers’ freedom of choice in selecting card networks. Notably, these rules do not apply to credit card issuers with an active card issuance count of Rs 10 lakh or less. Furthermore, issuers operating their own authorized card networks are exempted from these regulations. RBI had previously released a draft circular on this matter in July 2023.

RELATED ARTICLES

Most Popular