Tuesday, July 16, 2024
HomeBusinessRBI asks card issuers to let customers choose card network

RBI asks card issuers to let customers choose card network

FILE PHOTO: FILE PHOTO: A Reserve Bank of India (RBI) logo is seen inside its headquarters in Mumbai, India, April 6, 2023. REUTERS/Francis Mascarenhas/File Photo/File Photo

The Reserve Bank of India (RBI) has directed card issuers, which include authorised payment system providers, banks and non-banks not to enter into any arrangement or agreement with card networks that restrains them from availing the services of other card networks.

As per this directive card issuers will have to provide an option to their eligible customers to choose from multiple card networks at the time of issue. For existing cardholders, this option needs to provided at the time of the next renewal. These directions will be effective six months from the date of issue of this circular.

Currently in India the authorised card networks include American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/ Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Ltd.

As per the current practice the authorised card networks tie-up with banks/non-banks for issuance of credit cards and 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, the RBI said in a circular.

“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 adding it had issued the fresh directive keeping the interest of payment system and public interest in mind.

The RBI has asked card issuers and card networks to ensure adherence to the above requirements and execute fresh agreements to accommodate the changes.

However, the directions will not be applicable to credit card issuers with the number of active cards issued by them being 10 lakh or less in number, the RBI said in the circular without specifying the reason.

As per the circular, card issuers who issue credit cards on their own authorised card network are excluded from the applicability of the circular.

Ambuj Chandna, President – Consumer Assets, Kotak Mahindra Bank, said, “This in line with RBI’s vision of bringing in credit card portability, offering customers the choice of a network. As a leading bank, we support this. As of today we do work with all key networks – both International and RuPay. In fact, we offer a wide range of 6 credit cards on RuPay which can be used for UPI transactions.”

Source link



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments