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Reserve Bank of India has changed the credit card rules. Credit card users will be able to select their preferred card network while purchasing the card. This notification has come after the review meeting of RBI.
RBI has directed card issuers, including banks, to sign exclusive agreements with card networks, barring them from using other networks.
RBI said authorized card networks tie up with banks/non-banks for issuing credit cards. The choice of network for the card issued to the customer is decided by the card issuer (bank/non-bank) and is linked to the arrangement that the card issuer has with the card network in terms of their bilateral agreements.
As per RBI instructions, card issuers should not enter into any arrangement or arrangement with the card networks that prevents them from availing the services of other card networks. Card issuers will offer their eligible customers the option to choose from multiple card networks when issuing credit cards.
The Reserve Bank has clarified that existing card holders can be given this option at the time of next renewal. The RBI said the contract between the card issuer and the bank or institution is limiting customers' options.
The RBI directive defines American Express Banking Corporation, Diners Club International Limited, Mastercard Asia, M/s National Payments Corporation of India-Rupay and Visa Worldwide Private Limited as authorized card networks.
RBI said the instructions regarding customer preference at the time of issuance will come into force within six months of issue. This date will be 6 September 2024.