New Debit, Credit Card Rules: The Reserve Bank of India (RBI) has put forward a proposal in its latest draft circular which empowers debit, credit and prepaid card users to select their preferred card network. The proposal challenges the existing norm, where card network options are predetermined by agreements between issuers and networks. Like credit card or debit card, you get a fixed network through both the cards.
Network means that card is either Visa Card, Mastercard or RuPay Card. When you are given a debit card or credit card from the bank, then as a customer you are not given the option to choose the desired network. You have to use the same card of the network that the bank gives you.
RBI’s draft proposal on debit and credit cards
RBI said that it is observed that the existing arrangement between card networks and card issuers (banks and non-banks) does not give the option to the customers to change the network of their cards. But after this circular of RBI, this option will now be given to the users, which will benefit them a lot.
According to RBI’s draft proposal, card issuers shall not enter into any arrangement or agreement with a card network that prevents them from availing the services of other card networks. Card issuers will now have to issue cards on more than one card network. Issuers will provide their customers with an option to choose from a number of card networks. This option can be exercised by the customer at the time of card issuance or any time thereafter.
What is card network portability?
You all are aware of mobile number portability. When you are not happy with your telecom provider, then you port your mobile number with another service provider. The Reserve Bank of India is now going to start a similar facility in the case of credit and debit cards. Through card network portability, customers will be able to transfer their card account from one network to another.
Card network portability allows the cardholder to retain his existing card account, balance and credit history while switching to another payment network.
On this, the central bank has sought comments from the stakeholders on the draft circular till August 4. This draft is very beneficial for the customers, it provides them the right to decide and portability, but due to this banks may face operational challenges and increased cost.
