The Reserve Bank of India (RBI), India’s central bank, has announced that Mastercard Asia / Pacific Pte. Ltd. (Mastercard) will not be allowed to bring new domestic debit card, credit card or prepaid card customers onto its network starting July 22, 2021 due to non-compliance with data storage rules, according to a Wednesday (July 14) press release.
The RBI said the action was taken in accordance with the powers vested in the central bank under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act). Mastercard is a payment system operator that has permission to run a card network in India under the PSS Act.
“Notwithstanding 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. This order will not impact existing customers of Mastercard,” the RBI said in the press release.
The news comes as the RBI told American Express Banking Corp. and Diners Club International Ltd. to not onboard new domestic clients onto their card networks starting on May 1. “These entities have been found non-compliant with the directions on Storage of Payment System Data,” the central bank said in an April press release, noting that the two entities have permission to operate card networks in India by the way of the PSS Act.
The RBI noted in the July release that every system provider was told to make sure that all data pertaining to the payment systems they run would be stored in a system only in India within six months of a circular on Storage of Payment System Data dated April 6, 2018. “They were also required to report compliance to RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor,” the RBI said in its July announcement.
The RBI was created in 1935 “in accordance with the provisions of the Reserve Bank of India Act, 1934,” according to the central bank’s website.
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