RBI Issues Draft Policy for Card Networks to Issue Debit, Credit, and Prepaid Cards

In the latest draft circular released by RBI, it is stated that cardholders will now be allowed to change the card network on their debit, credit, and prepaid cards. The circular states that card issuers like RuPay, Visa, MasterCard will issue cards across more than one network and must give customers an option to choose from any one of the available card networks.

The new rules will apply to both banking and non-banking companies that issue cards. In the following article, we will talk about this new development in detail.

RBI Begins New Arrangement with Card Networks to Issue Debit Credit and Prepaid Cards Post

Arrangement with Card Networks to Issue Debit, Credit, and Prepaid Cards

Currently, card networks like American Express, Mastercard, RuPay, and Diners Club tie up with non-banks and banks to issue credit, debit, and prepaid cards. For the card issued to customers, the choice of card network was decided by the card issuer and was based on the arrangements that card issuers have in agreement with the card networks.

Upon review, the RBI has concluded that agreement between card issuers and card networks currently does not take into account the choice of customers.

According to the powers conferred in the Payment and Settlement Systems Act 2007, the RBI has issued the following directions –

  • Card issuers should not get into any agreement or arrangement with card networks that restrains them from using services of other networks.
  • Card issuers must issue their credit, debit, or prepaid cards across more than one network.
  • Card issuers must provide the choice of choosing between one of the various card networks to eligible customers. Customers can either do this at the time of card issuance or at any later time.

The card networks and issuers must adhere to the above-mentioned requirements based on the existing or the renewed agreements, and also the fresh agreements in the latest circular. Moreover, the new directions for card issuers will come into effect from 1st October 2023.


There has been a steady rise in credit card outstanding in 2023 and it keeps rising on a year-to-year basis. When customers can choose their preferred card network, it is great for the segment, and will also boost competition among homegrown and international companies.

The RBI’s new proposal will offer a wide choice to customers and will end exclusive arrangements that card issuers and card networks have currently. Moreover, this will encourage more and more banks to offer their credit cards on UPI that will boost our homegrown RuPay network. The added competition that the new arrangement brings might decrease the profitability of card networks and issuers both, but the rise in volume of credit cards can balance the losses.

Head over to the comments section to share your thoughts regarding this new arrangement by RBI.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top