STOCK MARKET BSE NSE

RBI bars Mastercard from adding customers in India from July 22

According to the regulator, the restriction was imposed as the company failed to comply with its directions on storage of payment system data.

Published: 15th July 2021 11:18 AM  |   Last Updated: 15th July 2021 11:18 AM   |  A+A-

Reserve Bank of India, RBI

A security woman guards at the RBI headquarters in Mumbai. (File photo| PTI)

Express News Service

NEW DELHI:  In yet another crackdown against global credit card and payments companies for flouting data localisation norms, the Reserve of India (RBI) on Wednesday barred Mastercard from adding new domestic credit card customers from July 22, 2021. According to the regulator, the restriction was imposed as the company failed to comply with its directions on storage of payment system data. The order, however, will not impact existing customers.

“Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on storage of payment system data. Mastercard shall advise all card issuing banks and non-banks to conform to these directions,” the RBI said in a statement.
Mastercard is one of the top three card issuers in India, along with Visa and Rupay.

While Visa and Mastercard target a specific customer segment who use the cards frequently and for high-value transactions, RuPay debit cards may not have that much customer base. Besides, Mastercard also dominates the debit card space over credit cards. The latest RBI decision to limit fresh card issuance from Mastercard will mean the market will essentially function as a duopoly between Visa and homegrown card network Rupay.

As for banks, there could be some delay in banks’ issuing fresh cards as they make the transition to a new platform. The move also comes at a time when the government has also been pushing banks to focus more on RuPay cards. This is the third company to face the regulator’s wrath for not being compliant with data storage norms, announced in April 2018, that require storing transaction data only within India. In April, the RBI had also barred American Express and Diners Club from adding new customers.

Mastercard said it is disappointed with the RBI’s move. “We will continue to work with them to provide any additional details required to resolve their concerns. Building on our considerable and continued investments in India, we remain committed to working with our customers and partners in advancing on the Government’s Digital India vision,” it added.

Will work to resolve concerns: Mastercard

Mastercard said: “While we are disappointed with the stance taken by the RBI, we will continue to work with them to provide any additional details required to resolve their concerns... We remain committed to working with our customers and partners in advancing on the government’s digital India vision.”



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp