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The Reserve Bank of India (RBI) has published a draft circular on Arrangements with Card Networks for issue of Debit, Credit, and Prepaid Cards. This article highlights the RBI’s call for feedback from stakeholders regarding the draft circular.

Analysis: The draft circular aims to address the availability of choice for customers by mandating card issuers (banks / non-banks) to issue cards on multiple card networks. It prohibits card issuers from entering into agreements that restrict their ability to collaborate with other card networks. The RBI recognizes the need to enhance options for customers and promote competition within the card network ecosystem.

Stakeholders, including authorized payment system providers, participants (banks and non-banks), and card networks, are encouraged to review the draft circular and provide their comments and feedback. They can submit their feedback via email or post to the Chief General Manager-in-Charge of the Department of Payment and Settlement Systems at the Reserve Bank of India’s Central Office in Mumbai.

Reserve Bank of India

Press Release: 2023-2024/543 Dated: | July 05, 2023

RBI invites comments on draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

The Reserve Bank of India has today placed on its website the draft circular on  Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards for feedback from stakeholders. Comments / Feedback, if any, may be sent by email, or by post to the Chief General Manager-in-Charge, Department of Payment and Settlement Systems, Central Office, Reserve Bank of India, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai – 400 001, on or before August 4, 2023.

2. The draft circular mandates card issuers (banks / non-banks) to issue cards on more than one card-network along with providing customers the facility to choose any one among the multiple card networks. It also restrains card issuers from entering into agreements that limit their ability to tie-up with other card-networks.

(Yogesh Dayal)
Chief General Manager

Draft Circular for Comments

CO.DPSS.POLC.No. S-**** /02-14-003/2023-24

July 05, 2023

The Chairman / Managing Director / Chief Executive Officer

Authorised Payment System Providers / Participants (Banks and Non-banks)
Madam / Dear Sir,

Draft Circular – Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

The authorised card networks1 tie-up with banks / non-banks for issuance of debit / credit / prepaid cards. The choice of affiliated network2 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.

2. 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.

3. In exercise of the powers conferred under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), the RBI being satisfied that it is necessary and expedient, in the interest of payment system and public interest, to do so, hereby, directs as under:

a) Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.

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

c) 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.

4. Card issuers and card networks shall ensure to adhere to the above requirements in:

a) existing agreements at the time of amendment or renewal thereof, and

b) fresh agreements executed from the date of this circular.

5. The directions at para 3 (b) and (c) above shall be effective from October 01, 2023.

Yours faithfully,

(Gunveer Singh)
Chief General Manager-in-Charge

Notes:-

1 Authorised card networks in India 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.

2 The affiliated network branded as American Express, Diners Club International, Mastercard, RuPay or Visa is displayed on the card.

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