RBI New Card Issue Rules: Reserve Bank of India (RBI) has made new guidelines for issuing credit cards by banks and NBFCs. Let us know what effect this will have on the customers.
RBI New Card Issue Rules: Reserve Bank of India (RBI) has made new guidelines for issuing credit cards by banks and NBFCs. According to these guidelines, card issuing banks and NBFCs have been instructed to give the customers the option of which network they want to get the card. RBI made it clear that these banks or NBFCs should not enter into exclusive arrangements or agreements with any card networks like American Express, Mastercard Asia, Diners Club and Rupay.
In India, card networks like Visa, MasterCard, American Express, Diners Club, Rupay etc. have tie ups with many leading banks and NBFCs.
To whom will the rule not apply?
In its guidelines, RBI said that these guidelines are not applicable to those banks or NBFCs which have less than 10 lakh active cards. Additionally, card issuers that issue credit cards on their own authorized card networks are excluded from this. Even when a card comes for renewal, banks or NBFCs should give their customers the option to choose the card network.
Why did RBI issue these guidelines?
The Reserve Bank of India (RBI) has observed that the country’s leading banks and NBFCs issue cards of a fixed network to the customers without asking their consent. Banks benefit from this because big card networks have exclusive tie-ups with banks. This includes many benefits including service fees or reward points and customer offers.
What is its benefit
- Rupay Credit Card will benefit from these guidelines of Central Bank
- If the customer chooses Rupay credit card, he can link it with his UPI. Currently, UPI payment does not provide the option to link Visa and MasterCard.
- Apart from this, the country’s credit card network Rupay has the freedom to choose its customer.
- Annual fees reduced on many Rupay Credit cards
- From the merchant’s point of view, lower MDR has to be paid on Rupay credit card swipe.
