Banks should give customers the option to choose card network, RBI's instructions in new circular
RBI: In a circular released on Wednesday, the RBI advised card-issuing businesses not to enter into any contracts or agreements with the card network that would restrict users' access to other networks' offerings.
You can now select the network of your choice if you are a debit or credit card customer. This facility will need to be provided by banks. In the order, the RBI stated that banks will allow customers to select any network when issuing credit-debit cards. Customers cannot be forced by banks to use a specific card network. Within six months, this rule must be put into effect.
RBI said in a circular on Wednesday that card-issuing companies should not enter into any agreement or arrangement with the card network that prevents customers from availing of the services of other networks. Those customers who currently have cards will have to be given the option to choose the network at the time of card renewal. The central bank said the review has revealed that the arrangements existing between card networks and card issuers are not suitable for providing choices to customers.
Bank Bazaar CEO Adil Shetty said this decision of RBI will give more options to customers when getting a new card or while renewing it. This will improve the consumer experience.
This directive will not apply to credit card issuers whose number of active cards is Rs 10 lakh or less. Apart from this, institutions issuing credit cards on their authorized card networks have been kept out of these instructions. Other networks including Visa and Master offer the service. Networks like American Express Banking Corp, Diners Club International, Mastercard, National Payments Corporation of India's RuPay and Visa Worldwide currently offer the card. Card issuers and networks will have to follow the new RBI guidelines while renewing and entering into new agreements.
