RBI issues new credit card guidelines: Know what has changed
The Reserve Bank of India (RBI) has mandated banks and non-banking financial companies (NBFCs) to offer customers a choice of multiple card networks when issuing credit cards. The new rules will be effective from September 6, and existing cardholders will be given the option at their next renewal. The decision was made after RBI discovered that certain arrangements between card networks and issuers restricted customers' choice to avail other network partners.
Exemptions and authorized card networks
This directive will not apply to credit card issuers with fewer than 10 lakh active cards or those operating their own authorized network. Authorized card networks in India are following: American Express, Diners Club, MasterCard, National Payments Corporation of India, RuPay, and Visa. Card issuers and networks are required to comply with guidelines on both existing and new agreements as well as renewals. Presently, the network for issued credit cards is decided by card issuer based on bilateral agreements.
Credit card usage is rising in India
Credit cards have been experiencing significant growth in India, with the total number approaching 100 million. As of December 2023, there were 97.9 million outstanding credit cards, with a record 1.9 million added in that month alone. The year 2023 saw an addition of 16.71 million cards, a considerable increase from the 12.24 million added in 2022. This consistent growth over the past five years can be attributed to a combination of banks' sustained efforts and evolving consumer spending habits.
