RBI Requests Banks to Let Customers Select Cards from Various Networks

In a step that will assist card users, Reserve Bank has instructed banks to provide their qualified clients with the choice to choose from a number of card networks when credit or debit cards are issued.

Additionally, the central bank requested that credit card issuers refrain from entering into any agreements or arrangements with card networks that would prevent users from using the services of other networks.

In a circular, the Reserve Bank said, “After review, it is found that certain agreements between card networks and issuers are not supportive of customers’ availability of choice.”

It said that this option could be made available to current cards when their next renewal comes up.

“The RBI thus orders, having determined that it is both essential and expedient to act in the interest of the payment system and the public interest, as follows: It said that card issuers are not permitted to engage in any contracts or agreements with card networks that prevent them from using the services of other card networks.

Authorized card networks were specified in the circular, including Rupay and Visa Worldwide Pte Limited from National Payments Corporation of India, American Express Banking Corp., Diners Club International Ltd., and MasterCard Asia/Pacific Pte Ltd.

It said that when new agreements are signed and current agreements are amended or renewed, card issuers and networks must make sure that the RBI’s requirements are followed.

It did state, however, that credit card issuers with less than 10 lakh active cards would not be subject to the directive.

The circular said that “card issuers who issue credit cards on their own authorized card network are excluded from its applicability.”

It also said that the instructions would take effect six months from the date of this circular and would provide eligible consumers with a choice of numerous card networks.