The Reserve Bank of India (RBI) has introduced a draft rule that empowers debit, credit, and prepaid card users to select their preferred card network. This rule challenges the existing practice card network options are predetermined by agreements between issuers and networks. The RBI proposed that from October 1, 2023, credit card issuers will have to give customers the option to choose the network of their choice. According to a draft circular by RBI, card issuers would be prohibited from entering into any agreement with card networks that limit them from availing the services of other card networks. The rules would be applicable to both banks and non-banking financial companies that issue credit cards, debit cards, or prepaid cards. Authorised card networks currently tie up with banks/non-banks for the issuance of debit, prepaid and credit cards. However, the choice of a affiliated network for a card is decided by the card issuer. This choice is also linked to the arrangements that the card issuers have with the card network. In the circular, RBI informed that "arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers"
In 2021, the RBI the Reserve Bank of India (RBI) mposed an indefinite prohibition on Mastercard, American Express, and Diners Club, preventing them from issuing fresh debit, credit, or prepaid cards to customers due to their failure to comply with rules regarding local data storage. However, in June 2022, the ban was lifted by the central bank after confirming that the companies had adhered to the regulations concerning the storage of payment data.
