The Reserve Bank of India (RBI) has directed banks to provide an option to their eligible customers to choose from multiple card networks at the time of issuing credit or debit cards.

The central bank also asked credit card issuers not to enter into any arrangement or agreement with card networks that restrain customers from availing the services of other networks.

"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," the Reserve Bank said in a circular.

For existing cardholders, this option may be provided at the time of the next renewal, it added.

"The RBI being satisfied that it is necessary and expedient, in the interest of payment system and public interest, to do so, hereby, directs... Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks," it said.

Networks of American Express, Diners Club International, Mastercard, Visa and homegrown RuPay provide services to customers in India, but the provider is usually predetermined by the bank depending on the card issued.

Card issuers and networks will have to ensure adherence to the RBI's guidelines in existing agreements at the time of amendment or renewal and when fresh agreements are executed, the central bank further said.

However, it said the direction would not be applicable to credit card issuers with number of active cards issued by them being 10 lakh or less in number.

"Card issuers who issue credit cards on their own authorised card network are excluded from the applicability of the circular," it said.

The directions of providing options to the eligible customers to choose from multiple card networks would be effective six months from the date of this circular, it added.