Mumbai: The Reserve Bank of India (RBI) on Wednesday issued a draft circular asking banks and non-bank lenders to issue credit, debit and prepaid cards on multiple networks like Visa, MasterCard, Rupay along with providing customers the facility to choose any one. That option may be exercised by customers either at the time of issuing, or later, it added.
The norms also restrained card issuers from entering into agreements with card networks that limit their ability to tie-up with other card-networks.
The central bank said that it has come up with these norms after it observed that the existing arrangements between card networks and banks and NBFCs, also called “issuers", were “not conducive to the availability of choice for customers”.
"On a review, it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers," the RBI said in a draft circular seeking comments.
Several directions were made under the draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards.
Typically, card networks tie up with banks for issuing debit, credit, and prepaid cards to customers, where the choice of the affiliated network (like American Express, Diners Club, Mastercard, RuPay, or Visa as displayed on the card) is decided by the bank.
“Card issuers shall issue cards across more than one card network,” said the RBI.
“Card issuers shall provide an option to their eligible customers to choose any one among the multiple card networks. This option may be exercised by customers either at the time of issue or at any subsequent time.”
These changes will be effective October 1 and stakeholder feedback is invited by August 4, the RBI said.
