RBI issues new order on credit cards to give customers more choice

The RBI on Wednesday issued a directive barring credit card issuers (banks and non-banks) from coming into into any association or settlement with card networks reminiscent of American Express, GraspCard Asia, Diners Club and Rupay that restrain them from availing the providers of different card networks.

The order additionally states that card issuers shall present an possibility to their eligible customers to select from a number of card networks on the time of concern. For present cardholders, this selection could also be offered on the time of the following renewal. This route shall be efficient six months from the date of this round, the RBI mentioned.

Card issuers and card networks shall guarantee adherence to the these necessities in present agreements on the time of modification or renewal thereof, and recent agreements which might be executed, the RBI mentioned.

The RBI mentioned that the step has been taken in public curiosity as a overview confirmed that some preparations present between card networks and card issuers usually are not conducive to the supply of choice for customers.

The RBI additionally mentioned that the order pertaining to offering a number of choices to customers won’t be relevant to credit card issuers with variety of energetic cards issued by them being 10 lakh or much less in quantity.

Also card issuers who concern credit cards on their very own authorised card community are excluded from the applicability of the round.

(With inputs from IANS)