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RBI diktat to banks, credit card companies set to upend long-term integrations

Economic Times · 9m

The Reserve Bank of India's recent directive to banks and card schemes like Visa and Mastercard to avoid exclusive arrangements could pose a challenge to the long-standing partnerships between these institutions. Banks have relied on integrated partnerships with these card schemes to make their credit card operations profitable and appealing to customers. However, with the option for customers to choose other card schemes like RuPay, these partnerships may face disruption. Banks will need to educate customers on the differences between card schemes, and the regulatory push to make RuPay a significant player may further reduce reliance on international giants like Visa and Mastercard. Implementing this directive will be challenging for banks already grappling with regulatory changes and aiming to maintain a level playing field. In a rapidly growing Indian credit card market, these changes will affect lenders' financial plans and cobranded card partnerships.