RBI’s Journey Towards Credit Card Network Diversity

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RBI’s Journey Towards Credit Card Network Diversity
  • By Gautam Tejwani
  • 08th March, 2024
  • Banking

Empowering Consumers: RBI’s New Credit Card Network Policy

Central Bank Puts Power in Consumers’ Hands

In a move set to shake up the credit card landscape, the Reserve Bank of India (RBI) has announced a groundbreaking policy change. From September onwards, consumers will have the freedom to choose their preferred card network – whether it’s Visa, Mastercard, or others – when they apply for a new credit card. Moreover, existing cardholders will be given the option to switch to a different network upon card renewal.

Breaking Down the New Guidelines

The RBI’s directive, issued on Wednesday, March 6th, is a response to concerns regarding exclusive arrangements between credit card issuers, like banks, and specific card networks. Previously, these arrangements often prevented consumers from accessing rival networks.

The decision marks a shift from the RBI’s initial proposal in July 2023, which aimed to impose similar restrictions on debit and prepaid cards. However, the final guideline focuses solely on credit cards.

Understanding the Dynamics

Typically, banks and non-banking institutions team up with various card networks to issue credit cards. These networks include big names like American Express, Diners Club, Mastercard, RuPay, and Visa.

However, the new policy doesn’t apply to credit card issuers with fewer than 1 million outstanding cards, representing a small portion of the market. The bulk of credit card issuers – 13 out of 34 – which hold a whopping 92% of the market share, will be affected. Notable players like HDFC Bank, SBI Card, ICICI Bank, and Axis Bank command nearly 70% of this share.

Industry’s Response

Major stakeholders, including Mastercard, have expressed support for the RBI’s initiative to increase consumer choice. However, Visa and American Express have yet to comment officially.

Industry experts believe that most banks won’t be significantly impacted by the new guideline. Adhil Shetty, CEO of BankBazaar.com, highlights that many banks already collaborate with multiple card networks, easing the transition for consumers.

Integration with UPI

The RBI’s move coincides with the integration of RuPay cards with the Unified Payments Interface (UPI), a homegrown fast payments platform. This integration allows RuPay cardholders to make payments through UPI, a feature not yet available to other card networks.

The directive also enables eligible RuPay cardholders to link their cards to global networks, facilitating international transactions. This integration aligns with the increasing trend of consumers favoring RuPay due to its UPI compatibility.

A Win for Consumers

Jitendra Dhaka, founder of BankSathi, believes that offering a range of card options enhances a bank’s competitiveness. As consumers become more discerning, the ability to choose their preferred network becomes paramount. With UPI gaining widespread acceptance, the preference for RuPay is on the rise, pushing banks to

adapt and cater to evolving consumer preferences.


The RBI’s decision to empower consumers with the choice of credit card networks marks a significant step towards fostering competition and enhancing user experience in the financial sector. By breaking exclusive arrangements and promoting network diversity, the central bank aims to create a more inclusive and consumer-centric credit card ecosystem. As the landscape continues to evolve, banks and financial institutions must remain agile to meet the changing needs and preferences of their customers.

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