85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
In a significant move towards the credit card business, the Reserve Bank of India on Wednesday asked banks and non-banking financial companies (NBFCs) to give customers the option to choose from multiple networks when they issue credit cards.
Existing cardholders may be given the option at the time of their next renewal, the Reserve Bank of India (RBI) said in a communication to banks, NBFCs, and payment system providers. The directive will be effective six months later from September 6.
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In exercise of the powers conferred under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), the RBI being satisfied that it is necessary and expedient, in the interest of payment system and public interest, to do so, the central bank said in a statement.
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It said that it found in a review that some arrangements between card networks and issuers are “not conducive to the availability of choice for customers”.
RBI prohibited card issuers and networks from making any arrangement or agreement that restrains customers from availing the services of other card networks.
The network for a card issued to a customer is currently decided by the card issuer – based on bilateral agreements.
It is worth highlighting that RBI’s directive will not be applicable to credit card issuers whose tally of active cards is one million or less.
Card issuers with their own authorized network are excluded too.
RBI’s directive defines authorized card networks as American Express Banking Corp, Diners Club International Ltd, MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India–Rupay and Visa Worldwide Pte. Limited.
The credit cards market is growing in India, with the total number inching towards the 100 million mark.
In 2023, India witnessed the addition of 16.71 million cards, a significant increase from the 12.24 million added in 2022.
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