Updated: July 15, 2021 10:02:53 am
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.
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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.
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