RBI bars Mastercard from issuing new cards from July 22
In a major supervisory action, the Reserve Bank of India on Wednesday indefinitely barred the US-based Mastercard from issuing new credit, debit, and prepaid cards from July 22 for its failure to comply with data storage norms. Mastercard is the third company to get barred by RBI from acquiring new customers after American Express Banking Corp. and Diners Club International over data storage issues.
Disappointed with the stance taken by RBI: Mastercard
In a statement, Mastercard said that it is disappointed with the stance taken by RBI. "The Reserve Bank of India (RBI) has today imposed restrictions on Mastercard Asia/Pacific Pte. Ltd. (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021," the central bank said in a statement.
This will not impact existing Mastercard customers: RBI
The RBI, however, clarified that its supervisory action will not impact the services of the existing customers of Mastercard in the country. Announcing the ban on Mastercard, RBI said, "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."
What does RBI's Storage of Payment System Data circular say?
Mastercard is a payment system operator authorized to operate a card network in the country under the Payment and Settlement Systems Act, 2007. In terms of RBI's circular on Storage of Payment System Data on April 6, 2018, all system providers were directed to ensure that the entire data relating to payment systems is stored only in India within a period of six months.
Mastercard was required to submit a board-approved System Audit Report
They were also required to report compliance to RBI and submit a board-approved System Audit Report conducted by a CERT-In impaneled auditor within specified timelines. "Mastercard is fully committed to our legal and regulatory obligations in the markets we operate in," it stated.
Will continue working with RBI to resolve their concerns: Mastercard
"Since the issuance of the RBI directive requiring on-soil storage of domestic payment transaction data, we have provided consistent updates and reports regarding our activities and compliance with required stipulations," it stated. "While we're disappointed with the stance taken by RBI in their communication dated July 14, we'll continue to work with them to provide additional details required to resolve their concerns," it added.