The Reserve Bank of India has barred exclusive agreements between banks and card networks and has allowed customers to choose the network at the time of issue.

At present, the card issued to a customer is decided by the card issuer (bank/non-bank) and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements.

“On a review, it is observed that some arrangements existing between card networks and card issuers are not conducive to the availability of choice for customers,” RBI said in a circular.

RBI said that card issuers shall not enter into any arrangement or agreement with card networks that restrains them from availing the services of other card networks. “Card issuers shall provide an option to their eligible customers to choose from multiple card networks at the time of issue. For existing cardholders, this option may be provided at the time of the next renewal,” the central bank said.

Authorised card networks include American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte Ltd, National Payments Corporation of India–Rupay, and Visa Worldwide Pte Ltd.

However, the direction on allowing users to pick the network shall not be applicable to credit card issuers with a number of active cards issued by them being 10 lakh or less. Card issuers who issue credit cards on their own authorised card network are excluded from the applicability of the circular.