Skip to main content

Arrangements with Card Networks for issue of Credit Cards

Reserve Bank of India (RBI) has issued guidelines on arrangements with card networks for issue of credit cards.

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 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?

The 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 credit cards?

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

What are the guidelines on arrangements with card networks for issue credit cards?

RBI has directed the following on arrangements with card networks for issue of credit 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 provide an option to their eligible customers to choose from multiple card networks at the time of issue.  For existing cardholders, this option may be provided at the time of the next renewal.

Which card issuers are exempted from the guidelines?

The following card issuers are exempted from the applicability of the guidelines –

  • Credit card issuers with number of active cards issued by them being 10 lakh or less in number.
  • Card issuers who issue credit cards on their own authorised card network.

From when shall the guidelines be applicable?

The guidelines shall be effective 6 months from the date of the guidelines (i.e. March 06, 2024). 

Card issuers and card networks shall ensure to adherence 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

Reserve Bank of India. (2024, March 06). 'Arrangements with Card Networks for issue of Credit Cards'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12619&Mode=0


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

  1. JaadugarMarch 7, 2024 at 10:29 PM

    Can I change my card from diners club black toh Visa

    ReplyDelete
    Replies
    1. Inquisitive MindMarch 8, 2024 at 8:37 PM

      The facility to choose from multiple card networks will be available from September 06, 2024 and for existing cardholders the option will be available at the time of card renewal. So if your card is due for renewal after September 06, 2024, you will be able to choose from the card network options offered by your bank.

      Delete

Post a Comment

Popular Posts

Amendments in / additions to forex guidelines

Reserve Bank of India (RBI) has amended various forex guidelines. This article lists out some of the such recent amendments. What are the updates in the existing guidelines? Previous guidelines Revised guidelines Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills and non-convertible debentures / bonds and commercial papers issued by an Indian company. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. The balance...
Post a Comment
Read more

FX Global Code

Reserve Bank of India (RBI) has signed its renewed Statement of Commitment (SoC) to the FX Global Code.  What is FX Global Code? FX Global Code is a set of global principles of good practice in the foreign exchange market. The Code contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The establishment of the Code was facilitated by the Foreign Exchange Working Group (FXWG), which operated under the auspices of the BIS Markets Committee.  The Code was developed by a partnership between central banks and market participants from around the globe and was first published in 2017. The Code promotes a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of market participants, supported by resilient infras...
Post a Comment
Read more

Nomination for demat accounts and mutual fund folios

Securities and Exchange Board of India (SEBI) had revised the guidelines on nomination for demat accounts and mutual fund folios.   Which entities are covered by the guidelines? The following regulated entities (REs) are covered by the guidelines – Asset Management Companies (AMCs) of Mutual Funds (MFs) and their Registrars to an issue and share Transfer Agents (RTAs)  Association of Mutual Funds in India (AMFI)  Recognized Depositories  Registered Depository Participants (DPs) What are the guidelines on nomination facility? Nomination shall be mandatory for single holding and optional for jointly held accounts / folios. However, an investor having single holding / account / folio can opt-out of nomination, either online or through physical / offline mode. In case a joint account / folio becomes single holding, post the demise of holders, either nomination or ‘opt-out’, is mandatory. Investors shall have the option to specify guardians when nominees are minors....
Post a Comment
Read more

Nomination Facility in Banks

Reserve Bank of India (RBI) has issued directions on nomination facility in deposit accounts, safe deposit lockers and articles kept in safe custody with the banks. What is the legal framework for nomination facility in banks? Banking Regulation Act, 1949 (BR Act) contain provisions on nomination facility in banks. Section 45ZA – Nomination for payment of depositors' money  Where a deposit is held by a banking company to the credit of one or more persons, the depositor / all the depositors together, may nominate one person to whom in the event of his / their death, the amount of deposit may be returned by the banking company. Where the nominee is a minor, the depositor shall appoint any person to receive the amount of deposit in the event of his death during the minority of the nominee. Section 45ZC – Nomination for return of articles kept in safe custody with banking company  Where any person leaves any article in safe custody with a banking company, such person may nominate ...
Post a Comment
Read more

Recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)

Reserve Bank of India (RBI) has invited applications for recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs). What is the basis of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)? Reserve Bank of India (RBI) had issued ‘ Omnibus Framework for recognition of Self-Regulatory Organisations for Regulated Entities of the Reserve Bank ’ dated March 21, 2024, wherein broad parameters, viz., objectives, responsibilities, eligibility criteria, governance standards, application process, etc., were specified. It was also stated that other sector-specific guidelines like number of SROs, membership, etc., shall be issued separately whenever a sectoral SRO is intended to be set up. RBI has now invited applications for recognition of SROs for the NBFC sector under the aegis of the aforesaid omnibus framework.  What are the membership criteria for the SRO for NBFCs? The SRO for NBFC sector is primarily envisaged for NBFCs...
Post a Comment
Read more