The Reserve Bank of India (RBI) has asked all payment system operators in the country to store data within India to ensure safety and security of users’ information. The RBI move has come at a time when social media giant Facebook has faced a global backlash over breach of user data.
The operators will be given six months’ time to comply with the directive of the central bank. “Ensuring the safety and security of payment systems data by adoption of the best global standards and their continuous monitoring and surveillance is essential to reduce the risks from data breaches while maintaining a healthy pace of growth in digital payments,” the RBI said in a statement on ‘Developmental and Regulatory Policies’.
“In recent times, the payment ecosystem in India has expanded considerably with the emergence of new payment systems, players and platforms,” the RBI said.
RBI Deputy Governor BP Kanungo said, “it is observed that at present only certain payment system operators and their outsourcing partners store the payment system data either partly or completely in the country. In order to have unfettered access to all payment data for supervisory purposes, it has been decided that all payment system operators will ensure that data related to payment systems operated by them are stored only inside the country within a period of 6 months.”
“Detailed instructions will be issued in this regard within one week,” the RBI said. According to sources, some of the foreign payment system operators in India will have to set up data storage facilities in India and start storing data in India in the wake of the RBI directive. However, it’s not clear whether the new RBI policy will impact the payment system plans of WhatsApp and Google.
Meanwhile, the RBI has decided to gainfully harness the power of Big Data analytics by setting up a Data Sciences Lab within the RBI that will comprise experts and budding analysts, internal as well as lateral, who are trained inter alia in computer science, data analytics, statistics, In the backdrop of ongoing explosion in information gathering, computing capability and analytical toolkits, policy making benefits not only from data collected through regulatory returns and surveys but also from large volumes of structured and unstructured real-time information sourced from consumer interactions in the digital world, the RBI said.