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.

Banking & Finance

The Reserve Bank of India (RBI) has asked banks and non-banks to let their customers decide the authorised card network for the credit cards issued to them. This effectively means that credit card issuers, especially those with a large customer base, will have to enter into tie-ups with multiple card networks. The central bank observed that some arrangements currently existing between card networks and card issuers are not conducive to the availability of choice for customers. The directions under the aforementioned clause will be effective 6 months from the issue of the circular. The clause relating to choice of card networks for customers, however, is not applicable to credit card issuers whose active card base does not exceed 10 lakh. Further, the circular is not applicable to card issuers who issue credit cards on their own authorised card network.


      Currently, the choice of network for a card issued to a customer is decided by the card issuer (bank/non-bank).

      Now, RBI has barred card issuers from entering into any arrangement or agreement with card networks that restrains them from availing of the services of other card networks.

     

 

     


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