Banks need to issue credit cards or debit cards of more than one network while giving consumers the right to choose their preferred networks such as Visa, Mastercard or Rupay, the Reserve Bank of India (RBI) said on Wednesday.
The RBI issued the draft rules inviting comments from stakeholders. The banking regulator is looking to implement the proposal from October 1, 2023. The authorised card networks tie up with banks and non-banks for the issuance of debit, credit and prepaid cards.
However, the choice of the network is decided by the issuer and is linked to the arrangements the bank or the NBFC have with the networks.
“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,’’ the RBI said.
Issuers shall not enter into any arrangement or agreement with networks that restrain them from availing the services of other networks, the RBI said. It is also mandating that issuers should issue cards across more than one network.
Issuers should provide an option to their eligible customers to choose any one among the multiple card networks and this option may be exercised by customers either at the time of issue or at any subsequent time.
“Card issuers and card networks shall adhere to the above requirements in existing agreements at the time of amendment or renewal thereof, and fresh agreements executed from the date of this circular,’’ it added.
Rupee measures
An RBI committee has suggested several measures ranging from the short to long term on the internationalisation of the rupee. These include allowing non-residents to open rupee accounts overseas in phases and enabling the rupee as an additional settlement currency in existing multilateral mechanisms such as the Asian Clearing Union (ACU).
The inter-departmental group (IDG) also suggested integrating Indian payment systems with other countries for cross-border transactions, reviewing taxes on masala bonds and the inclusion of the domestic currency in the Special Drawing Rights (SDR) basket of the International Monetary Fund (IMF). RBI executive director R.S. Ratho heads the panel.
An international currency is used and held beyond the borders of the issuing country for transactions between residents and non-residents and between the residents of two countries other than the issuing country. The dollar is one such unit. India needs to encourage trade invoicing in rupees to promote internationalisation.
