On Wednesday, the Reserve Bank of India (RBI) requested that non-banking financial companies (NBFCs) and banks offer their customers the choice of selecting from various networks while issuing credit cards.
Six months later, on September 6, the directive from the regulator will go into effect. In a letter to banks, NBFCs, and payment system providers, the RBI stated that current cardholders might be offered the choice when their cards are next renewed.
Certain agreements between card networks and issuers are, according to the RBI, "not conducive to the availability of choice for customers," as per the findings of a review. It forbade card networks and issuers from entering into any kind of arrangement or contract that would prevent users from using rival card networks' services. Currently, the card issuer chooses the network for a customer's card based on bilateral agreements.
Credit card issuers with one million or fewer active cards will not be subject to the regulator's directive. Additionally excluded are card issuers who have their own authorized network.
MasterCard, Visa, American Express, Diners Club, National Payments Corporation of India for RuPay, and Visa are among the approved card networks in India.
In India, the number of credit cards is increasing and is getting close to 100 million. There were 97.9 million credit cards that were inactive. based on data from the RBI, as of December 2023, with a record addition of 1.9 million in that month. 16.71 million cards were added in calendar year 2023—a substantial rise above the 12.24 million added in 2022.
Over the last five years, this growth trend has continued, with the total number of credit cards in use rising from 55.53 million in December 2019 by about 77%. A combination of the persistent push from banks and changing consumer spending habits is responsible for this surge.
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