Banker has to give options to select which network card the customer wants - RBI

The Reserve Bank of India released a circular at the public interest regarding the card issuer networks and their agreements with the bakers.

1. 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.

2. On a review, it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers.

3. In exercise of the powers conferred under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), the RBI being satisfied that it is necessary and expedient, in the interest of payment system and public interest, to do so, hereby, directs as under:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.

2. Card issuers shall issue cards across more than one card network.

3. 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.

   These shall be effective from October 01, 2023.

4. Card issuers and card networks shall ensure to adhere to the above requirements in:

1. existing agreements at the time of amendment or renewal thereof, and

2. fresh agreements executed from the date of this circular.

   RBI invites comments on draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

   The Reserve Bank of India has today placed on its website the draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards for feedback from stakeholders. Comments / Feedback, if any, may be sent by email to dpssfeedback@rbi.org.in, or by post to the Chief General Manager-in-Charge, Department of Payment and Settlement Systems, Central Office, Reserve Bank of India, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai - 400 001, on or before August 4, 2023.

   2. The draft circular mandates card issuers (banks / non-banks) to issue cards on more than one card-network along with providing customers the facility to choose any one among the multiple card networks. It also restrains card issuers from entering into agreements that limit their ability to tie-up with other card-networks.