Credit card issuers, including banks and non-banks, are prohibited by an order from the RBI on Wednesday from entering into any kind of arrangement or agreement with card networks like American Express, MasterCard Asia, Diners Club, and Rupay that would prevent them from using those networks’ services.
Additionally, the order mandates that card issuers give their qualified clients the choice to select from a number of card networks at the time of issuance. At the time of the subsequent renewal, this option might be made available to current cardholders. The RBI stated that this directive will take effect six months from the date of this circular.
According to the RBI, when new agreements are signed and old agreements are amended or renewed, card issuers and card networks are responsible for making sure that these standards are followed.
According to the RBI, the action was taken in the public interest after an examination revealed that certain current agreements between card networks and issuers do not support customers’ access to a variety of options.
The RBI further stated that credit card issuers with fewer than 10 lakh active cards will not be covered by the rule requiring them to provide customers with multiple options.
The circular does not apply to card issuers that offer credit cards through their own authorized card network.
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