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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


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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

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