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Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

Reserve Bank of India (RBI) has issued draft circular on arrangements with card networks for issue of debit, credit and prepaid cards.

What is Debit Card?

Debit Card is a physical / virtual payment instrument linked to a Saving Bank / Current Account which can be used to withdraw cash, make online payments, do PoS terminal / Quick Response (QR) code transactions, fund transfer, etc.

What is Credit Card?

Credit Card is a physical / virtual payment instrument issued with a pre-approved revolving credit limit that can be used to purchase goods and services or draw cash advances.

What is Prepaid Card?

Prepaid Card is a physical / virtual payment instrument that facilitate purchase of goods and services, conduct of financial services, enable remittance facilities, etc., against the value stored therein.

What is a card network?

A card network is an organization that facilitates payment of card transactions between issuing banks and merchants.

Which are the authorised card networks in India?

Following are the authorised card networks in India –

Authorised Card Network Network branded as
American Express Banking Corp., USA American Express
Diners Club International Ltd., USA Diners Club International
MasterCard Asia / Pacific Pte. Ltd., Singapore Mastercard
National Payments Corporation of India RuPay
Visa Worldwide Pte. Limited, Singapore Visa

What are the existing arrangements with card networks for issue of debit, credit and prepaid cards?

The authorised card networks tie-up with banks / non-banks for issuance of debit / credit / prepaid cards. The choice of affiliated network for a card issued to a customer is decided by the card issuer and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements.

What are the draft guidelines on arrangements with card networks for issue of debit, credit and prepaid cards?

Reserve Bank of India (RBI) has directed the following on arrangements with card networks for issue of debit, credit and prepaid cards –

  • Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
  • Card issuers shall issue cards across more than one card network.
  • 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.

From when shall the draft guidelines be applicable?

The guidelines shall be effective from October 01, 2023. 

Card issuers and card networks shall ensure to adhere to the requirements in existing agreements at the time of amendment / renewal and in fresh agreements.


References

Reserve Bank of India. (2023, June 30). 'Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India'. Retrieved from https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=12043

Reserve Bank of India. (2023, July 05). 'Draft Circular - Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards'. Retrieved from https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4280

Reserve Bank of India. (2023, July 05). 'RBI invites comments on draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55993


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