The Reserve Bank of India (“RBI”) has issued a notification on “Arrangements with Card Networks for issue of Credit Cards” directing the following:
1. Card issuers should not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
2. Card issuers must provide an option to their eligible customers to choose from multiple card networks at the time of issue. For existing cardholders, this option may be provided at the time of the next renewal. [This requirement will gain effect from 6th September, 2024]
Card issuers and card networks have to ensure adherence to the above requirements in:
a) existing agreements at the time of amendment or renewal thereof, and
b) fresh agreements executed.
The above directions will not be applicable to:
- Credit card issuers with number of active cards issued by them being 10 lakh or less in number.
- Card issuers who issue credit cards on their own authorised card network
Background:
The authorised card networks tie-up with banks / non-banks for issuance of credit cards. The choice of network for a card issued to a customer is decided by the card issuer (bank / non-bank) and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements. 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. In light of this, and in the interest of payment system and public interest, the present Notification has been issued.
[Please note, Authorised card networks means American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/ Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited.]
Source: Reserve Bank of India
