RBI Revised New Rules on Credit Cards to give more freedom to choose any card network, be it a credit or debit card. Customer and the new rules are applicable from 5th March 2024.
The Reserve Bank of India (RBI) made a significant announcement on March 5th. It issued clear instructions to banks and other financial institutions. The statement asserts that customers must be given the freedom to choose any card network, be it a credit or debit card. No entity has the power to prevent customers from switching to another card network. This will give customers the freedom to choose the card network of their choice.
Do you use credit or debit cards? If so, you’ll be pleased to learn that the RBI has issued new rules regarding their issuance that will benefit you. The RBI released this statement on March 5th (Tuesday). The new rules will require banks, financial institutions, and other organizations that issue credit or debit cards to provide multiple card network options. This means that customers will have the flexibility to switch to the card network of their choice. More freedom will be available as this decision will be in their hands.
The RBI has made it clear to financial institutions, including banks and credit issuing institutions, that they must not enter into special contracts with card networks that prevent customers from accessing card services from other networks. The central bank has introduced these new rules in response to some companies’ preventing customers from switching to other networks.
Here are some important takeaways from the announcement:
- Eligible customers should have the right to choose from multiple cards while issuing credit or debit cards. Those who already have the respective cards should be given this opportunity during the next renewal.
- Authorized card networks include American Express Banking Corporation, Diners Club International Limited, Mastercard Asia/Pacific Limited, National Payments Corporation of India- RuPay, and Visa Worldwide Limited.
- The circular was issued on March 5th, and the new rule will be implemented from September 6th, 2024.
- This rule does not apply to credit card issuers with less than 10 lakh active cards. It also does not apply to issuers that have their approved card network. According to the HDFC Bank website, there are currently five authorized card networks in India, namely RuPay, Visa, Mastercard, American Express, and Diners Club.
Many people use multiple credit cards nowadays, thanks to exclusive offers, cashback, and reward points. In the future, customers will be able to choose their card network.
