Reserve Bank of India (RBI) asks card issuers to offer more network options:
Reserve Bank of India (RBI) asks card issuers to offer more network options:
In a major move to improve customer choice and
promote fair competition, the Reserve Bank of India
(RBI) has asked voters not to impose any restrictions on the card network.
contract or arrangement relating to his business. The ability to use the
services of other network cards. The guidelines aim to ensure customers have
the flexibility to choose from a variety of card networks when issuing or
renewing their cards.
Current situation and important analysis: Currently, the card issued to the customer is determined by the credit card (bank or not) and is subject to the approval of the credit card and card network Association. However, the RBI noted that some of the existing agreements between network cards and debit cards do not encourage consumer choice, leading to regulatory hurdles.
Instructions for card issuers: According to the new
rules, cardholders cannot enter into agreements that prohibit them from using
network card services provided by other parties. Card issuers are now required
to offer eligible customers the option to choose from multiple issuers when
purchasing a new card. For existing cardholders, this option must be provided
at renewal.
Authorized Card Networks: Recognized various
authorized card networks including National Bank of India, American Express
Banking Corporation, Diners Club International Limited, Mastercard Asia Pacific
Private. Limited,
National Payments Corporation of India - Rupay and Visa Global Pte.
Customers will have the opportunity to choose between these networks when
purchasing a new card or upgrading an existing card.
Exceptions and Exemptions: The requirement to allow
users to choose networks does not apply to credit card issuers with fewer than
1 million cards issued. Additionally, credit card issuers that issue credit
cards to their business cards are also exempt from this notice.
Impact on the Industry: The RBI guidelines are
expected to have a major impact on the card industry, promoting fair
competition among card networks and giving customers the freedom to choose
their preferred network. This move will bring new changes and improve the
service quality of the card network because they will now compete for
customers' preferences.
Benefits for customers: The new regulations will give customers more options when choosing a network card, allowing them to choose based on rewards, cashback offer, confirmation and other features. More competition in the card network will increase credit card holders' profits and profits.
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