scorecardresearch
Follow Us:
Wednesday, August 04, 2021

Mastercard barred from adding clients

The RBI order will not impact existing customers of Mastercard, it said. The central bank said Mastercard should advise all card issuing banks and non-banks to conform to these directions.

By: ENS Economic Bureau | Mumbai |
Updated: July 15, 2021 10:02:53 am
RBI bars Mastercard from acquiring new customersMastercards becomes the third major Payment System Operator on which restrictions have been imposed for non-compliance with RBI's direction on Storage of Payment System Data. (File Photo)

The Reserve Bank of India (RBI) on Wednesday imposed restrictions on Mastercard Asia Pacific Pte Ltd from onboarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, citing non-compliance of storage of data in India.

The RBI order will not impact existing customers of Mastercard, it said. The central bank said Mastercard should advise all card issuing banks and non-banks to conform to these directions. “The supervisory action has been taken in exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act),” the RBI said.

As per the RBI circular on Storage of Payment System Data dated April 6, 2018, all system providers were directed to ensure that within a period of six months the entire data relating to payment systems operated by them is stored in a system only in India. However, foreign card networks were reluctant to store data in India citing various issues.

In April this year, the RBI had imposed restrictions on American Express Banking Corp and Diners Club International Ltd from on-boarding domestic customers from May 1, 2021, citing non-compliance. Earlier, the RBI had put curbs on HDFC Bank on onboarding new card customers in the wake of tech glitches.

As per Kazim Rizvi, founding director, The Dialogue, the RBI’s decision to restrict entities from onboarding customers is a crucial development to ensure that all payment system operators store or localise their end-to-end transaction data only in India.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
Advertisement

Advertisement
Advertisement
Advertisement