Reserve Bank of India bans Mastercard from adding new customers

Date: 2021-07-15   Author: Pankaj Singh  Category: #news

Reserve Bank of India bans Mastercard from adding new customers

Mastercard has reportedly been barred indefinitely by the Reserve Bank of India (RBI) from issuing new credit, debit, or prepaid cards to customers. This ban has been raised owing to Mastercard’s non-compliance with local data storage rules.

RBI, the central bank of the South Asian market, supposedly said that the ban will be initiated starting July 22. It further added that after providing sufficient opportunities and considerable time, Mastercard has been identified as non-compliant, as per the regulations of the Storage of Payment System Data.

Mastercard is one of the top three card issuers in the country and this new order would not affect existing customers of the company. Mastercard shall advise all banks and non-banks that issues cards to comply with these directions, as apparently stated by RBI.

This is not the first time that RBI has banned a company for non-compliance with these rules. The local data storage rules were introduced in 2018 and companies needed to be compliant within six months. Payment companies are supposed to store all transaction data from India within the local servers.

In April, RBI barred Diners Club and American Express from adding new customers, as they violated the same rules.

Previously, Mastercard, Visa, and other companies along with the U.S. administration requested the Indian government to reassess these rules. They argued that the rules are designed to enable uninhibited supervisory access to the regulators.

American Express has joined Visa and Mastercard in demanding a significant change or complete abolishment of these rules.

For the record, Mastercard Inc. is a New York-headquartered multinational financial services corporation. Its primary business throughout the world is to process payments between the credit unions of the buyers using the company branded credit, prepaid, & debit cards and the merchant banks. Mastercard has been a publicly traded company since 2006.

Source credits:

https://techcrunch.com/2021/07/14/india-bans-mastercard-from-adding-new-customers/



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Pankaj Singh

Pankaj Singh Develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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