Good News For Credit Card Holders, RBI Announces Multiple Card Network Choices For Card Holders

In recent years, the Reserve Bank of India (RBI) has been proactive in ensuring transparency and fairness in the financial sector, particularly in the credit card market. As credit cards become an increasingly vital tool for consumers in India, the RBI has taken steps to address issues that may limit consumer choice and flexibility. One such measure is the recent circular issued by the RBI, which aims to provide credit cardholders with more options and control over their financial products.

What Are The Details Of The Circular?

The Financial regulator, through a circular, directed the Banks in the country to be flexible while issuing cards and allow consumers to choose from options of multiple credit card networks. Highlighting the situation, RBI said that “On review, it was found that some of the arrangements existing between card networks and card issuers are not conducive to providing options to customers”.

This circular has been issued for 6 months, implying that the new rules framed under this circular will be applicable for the six months, starting from March 06, 2024. The eligible credit card holder will be able to avail the option of choosing from multiple card networks while renewing their currently held credit cards. It will also apply to new credit card applicants.

Some listed options available to the customers in the Indian market are, American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte Ltd, National Payments Corporation of India-RuPay and Visa Worldwide Pte Ltd. The Reserve Bank of India has asked the banks for strict adherence to these rules at the time of card renewal/amendment and during the fresh issue of a credit card.

The Circular also clarified that credit card issuers who currently have less than or equal to 10 lakh active cards do not have to comply with these directives. This circular does not apply to them. Furthermore, credit card issuers, who have their own card networks are also excluded from the directives of this circular.

Conclusion

This move by the Reserve Bank of India will increase consumer confidence and choice in the market. It will also help generate more consumers, in turn increasing the cash flow in the economy. However, consumers must be very careful while availing any credit card options or getting a credit card. All terms and conditions must be read carefully by the consumers to avoid any future conflicts.

In case of any further queries, grievances or more information, reach out to the Reserve Bank of India by contacting them here. You can access the circular here.