RBI seeks to give customers choice of card network

The Reserve Bank Wednesday asked banks and non-bank financial company (NBFCs) to issue credit, debit and prepaid cards on multiple networks to give customers the freedom to choose. The changes will be effective October 1.

The draft circular mandates card issuers (banks/non-banks) to issue cards on more than one card-network along with providing customers the facility to choose any one among the multiple card networks. This option can be exercised by customers either at the time of issue or at any subsequent time.

The banking regulator has also proposed to restraint the card issuers from entering into agreements that limit their ability to tie-up with other card-network.

"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 Reserve Bank said in a draft circular seeking comments.

The card issuers will not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks, the RBI said in the circular.

The card issuers will issue cards across more than one card network, the RBI circular added.

Card issuers and card networks shall ensure to adhere to the existing agreements at the time of amendment or renewal thereof and fresh agreements executed from the date of the circular.

These changes will be effective October 1 and stakeholder feedback is invited by Aug. 4, the RBI said.

Networks of American Express, Diners Club International, Mastercard, Visa and homegrown RuPay provide services to customers in India, but the provider is usually predetermined by the bank depending on the card issued.