Indian card issuers have been instructed not to enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks. In addition, the central bank has ordered card issuers to give an option to customers to choose from multiple card networks at the time of issue.  For existing cardholders, the option may be provided at the time of the next renewal.

The rule change follows a RBI review of existing card arrangements. The RBI said that the current set up is not conducive to the availability of choice for customers.

The RBI directions relate to American Express, Diners Club Mastercard, National Payments Corporation of India–Rupay, and Visa.

Issuers with less than 1 million active credit cards are excluded from the new requirement. In addition, any issuers that while those who issues cards on its own authorised network is also excluded.

The rule change to offer customers a choice of card networks will become mandatory in six months time.

The central bank has been planning to widen cardholders’ choice of network since last July. According to the RBI, around 99.5 million credit cards are in circulation in India. HDFC ranks first by market share with around 20.1 million credit card customers. State Bank of India ranks second with 18.6 million. ICICI and Axis Bank follow with 16.8 million and 13.7 million respectively.

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