RBI Credit Card Issuance Rules: What You Need to Know Before Getting a Credit Card
When applying for a credit card now, you will have the option to choose the card network according to your preference. The RBI has issued new guidelines for credit card networks and card issuance for banks and NBFCs. Accordingly, when issuing cards, customers will now have the option to choose from more than one card network. Banks will need to ask customers which network they prefer when issuing credit cards.
Furthermore, when existing credit card users renew their cards, they will have the option to change the card network. It should be noted that each credit card has a validity period of one, two, three, or more years. Upon expiry of the card, you will be able to change the network.
New Guidelines: Companies Exempted
According to the new guidelines, these regulations will not apply to organizations whose card issuance is 10 lakhs or less. Moreover, cardholders who issue their own authorized credit cards on their preferred card networks are exempt from compliance. Please note that these regulations will remain ineffective for up to 6 months from the date of notification.
What is a Credit Card Network?
Currently, there are 5 card network companies in India – Visa, MasterCard, RuPay, American Express, and Diners Club. These companies form partnerships with various financial institutions. Consequently, customers do not have the option to choose their preferred card network.
How Credit Card Users Benefit
Some card networks charge higher annual fees on credit cards compared to others. In such cases, if a bank does not offer you the option to choose from multiple card networks, you may be obligated to pay for the network that charges higher fees. If you have the option to choose from multiple card networks, you can select the most suitable option based on your needs, its fees, and the available services on the network.
Visa is the Largest Card Company, MasterCard Follows
Visa is the world’s largest card company. It operates in over 200 countries and regions. Its market cap is INR 489.50 billion, which is approximately INR 40 trillion. Following Visa, the world’s second most popular cashless payment company is MasterCard. Today, MasterCard is present in 150 countries, with a market cap of INR 372.55 billion, which is roughly INR 30 trillion.
RuPay: A Domestic Card Network
RuPay is India’s indigenous debit and credit card payment network. The name “RuPay” is derived from the words “Rupee” and “Payment”. It was launched in March 2012 to reduce the dominance of foreign card networks.
More than 80 Million Credit Card Users in the Country
According to a report from the banking market, as of April 2023, there were 86 million credit cards in circulation in India, marking a 15% increase from 75 million in April 2022. It is anticipated that by the beginning of 2024, the number of credit cards in circulation will surpass 100 million.
