2 new debit card, credit card rules applicable from October 1, 2023

The Reserve Bank of India (RBI) has proposed that cardholders be given the option of selecting their network provider for debit card, credit card, or prepaid cards. This new rule will come into effect from October 1, 2023.

At the moment, when you apply for a debit or credit card, the network provider is normally determined by the card issuer. The regulator intends to alter this procedure.

Two rules which will be applicable from October 1, 2023

Card issuers shall issue cards across more than one card network.

Further, card issuers shall provide an option to their eligible customers to choose any one among the multiple card networks. This option may be exercised by customers either at the time of issue or at any subsequent time.

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Customers can select this option either at the time the card is issued or when it is renewed, according to the RBI. Therefore, while renewing their current debit or credit card, existing customers will also have the option of choosing their preferred card network provider in addition to new consumers.

RBI draft proposal on debit, credit card holders getting option to select network provider

The central bank has asked card issuers, i.e., banks and finance businesses, in a draft circular issued on July 5, 2023, to allow clients to have more than one card choice and to allow them to choose their preferred network supplier for their cards.

Also read: Debit card, credit card rule set to change: Soon you will be able to choose your card network provider

In most cases, you are not given the choice to select the card network when applying for a debit card or credit card. With any of the card networks, including Visa, Mastercard, RuPay, etc., your bank normally has an exclusive agreement. The banks therefore issue cards on their favoured network. There are now five card networks in India.

American Express Banking Corporation, Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India - RuPay, and e) Visa Worldwide Limited.

RBI said in its draft proposal: "The authorised card networks tie up with banks / non-banks for issuance of debit/credit/prepaid cards. The choice of affiliated network for a card issued to a customer is decided by the card issuer and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements. On a review, it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers."