India central bank tightens rules for business cards
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
The Reserve Bank of India (RBI) on Thursday tightened rules for credit and debit cards used for business accounts.
The RBI asked business card-issuers to put in place an effective mechanism to monitor end use of funds.
Last month, the RBI had ordered Visa to stop using an unauthorized route to make business-to-business card payments which used fintech companies as an intermediary.
The regulator on Thursday also said that card-issuers cannot share data of customers with outsourcing partners, unless it is "essential to discharge the functions" of the outsourcing partners.
If data needs to be shared, explicit consent from the cardholder will need to be obtained, the RBI said, adding the storage and ownership of card data should remain with the card-issuer.
The amendments, which have come into effect, were "necessary and expedient in the public interest", the RBI said.
The central bank has taken steps to ensure that cardholders have the freedom to choose their card network. On Wednesday, it said credit card issuers cannot enter into any pact with card networks that restrain customers from availing the services of other networks.
On Thursday, the RBI reiterated that card issuers should inform customers of the implications of making only the minimum payment due on cards.
Also, banks and non-bank finance companies won't need prior approval to become co-branding partners of card-issuers, it said.
