The Reserve Bank of India (RBI) has implemented stricter regulations regarding the usage of credit and debit cards linked to business accounts. Business card issuers are required by the banking regulator to establish robust mechanisms for monitoring the utilization of funds.

The central bank says that card issuers shall not share card data (including transaction data) of the cardholders with the outsourcing partners unless the sharing of such data is essential to discharge the functions assigned to the latter. "In case of sharing of any data as stated above, explicit consent from the cardholder shall be obtained. It shall also be ensured that the storage and the ownership of card data remains with the card issuer", the RBI says.

The revisions, now in force, were deemed "essential and urgent in the public interest", according to the banking regulator. The RBI specifies that card issuers must notify customers about the ramifications of paying only the minimum amount due. All billing statements should prominently feature a warning message stating, "Opting for only the minimum payment each month could extend repayment over months/years, resulting in compounded interest charges on your outstanding balance", to alert cardholders about the risks associated with minimum payments.

The announcement follows a directive from the central bank instructing banks to provide customers with the choice of selecting from various card networks. These directives will be enforced starting September 6, 2024. They exempt card issuers who independently authorize credit cards on their networks and those with fewer than one million active cards issued by them.

"The authorized card networks tie up with banks / non-banks for issuance of credit cards. The choice of network for a 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", the RBI had said.

The decision was made following the banking regulator's observation that certain agreements between card networks and issuers were limiting customers' choices. These directives pertain to authorized card networks including American Express Banking Corp, Diners Club International Ltd, MasterCard Asia Pacific Pte Ltd, National Payments Corporation of India-Rupay, and Visa Worldwide Pte Limited.