The central bank of India declared on Wednesday that credit card issuers are not allowed to have any agreements with card networks that prevent users from using the services of other networks.
The Reserve Bank of India (RBI) stated in a circular that “after review, it is observed that certain arrangements between card networks and card issuers are not conducive to the availability of choice for customers.”
According to the central bank, card issuers must give their qualified clients the option to select from a number of card networks at the time of issuance.
It also stated that this option might be made available to current cardholders when their next renewal comes up.
Customers in India can access networks of American Express, Diners Club International, Mastercard, Visa, and the domestic RuPay system; however, the provider is typically chosen by the bank based on the card that was issued.
The central bank also stated that when new agreements are signed and existing agreements are amended or renewed, card issuers and networks must make sure that the RBI’s guidelines are followed.
A private bank banker stated, “Currently, customers must send a letter to ask for a switch in card network.”
“At the time of issuance and renewal, issuers will now be required to provide that choice.”
