RBI introduces new guidelines to broaden Credit Card network choices for consumers


The Reserve Bank of India (RBI) has launched new regulations aimed at expanding the options and flexibility available to consumers when choosing credit card networks. In a recent move, the RBI has directed that authorized card networks, which include both banking and non-banking entities, must now ensure they do not enter into exclusive agreements that could limit the choice of card networks for consumers. This initiative stems from the RBI‘s observation that certain contractual agreements were restricting consumer options.

Under the new guidelines, card issuers are now forbidden from engaging in agreements with card networks that restrict the issuer’s ability to work with multiple card networks. Furthermore, card issuers are required to offer eligible customers a choice of card networks when they apply for a new card. This choice should also be provided to existing cardholders at the time of card renewal.

The directive encompasses major card networks such as American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited. Both card issuers and networks are mandated to comply with these guidelines in their existing, amended, or new agreements.

However, the RBI‘s guidelines exempt credit card issuers that have fewer than 1 million active cards and those issuing cards through their authorized networks. The implementation of these guidelines regarding customer choice at the time of card issuance will be effective six months from March 6, 2024.

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