Credit Card Issuance and Network Tie-Ups

Last updated: 20 March 2024

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The Reserve Bank of India (RBI) has issued new directions regarding credit card issuance to ensure customers have more choice. Previously, card issuers decided the network based on their bilateral agreements. However, the RBI observed that some existing arrangements limited customer choice. Therefore, card issuers are now prohibited from entering agreements that restrict them from using other card networks. They must also offer eligible customers a choice of multiple card networks at the time of card issuance, with existing cardholders getting this option at renewal.

RBI/2023-24/131 CO.DPSS.POLC.No.S1133/02-14-003/2023-24 March 06, 2024 The Chairman / Managing Director / Chief Executive Officer Authorised Payment System Providers / Participants (Banks and Non-banks) Madam / Dear Sir, Arrangements with Card Networks for issue of 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

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FAQ :

Card issuers must now offer eligible customers a choice of multiple card networks when issuing credit cards, and existing customers at the time of renewal.

The authorised card networks are American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited.

Yes, the requirement to offer a choice of networks does not apply to credit card issuers with 10 lakh or fewer active cards. Also, issuers who issue credit cards solely on their own authorised card network are excluded.

The directions regarding offering a choice of networks will be effective six months from the date of the circular, which was March 06, 2024.

Card issuers and networks must ensure adherence to the new requirements in existing agreements at the time of amendment or renewal, and in all fresh agreements.

Notification No : RBI/2023-24/131 CO.DPSS.POLC.No.S1133/02-14-003/2023-24
Source : https://www.pdicai.org/Docs/RBI-2023-24-131_732024122442885.pdf

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