The Reserve Bank of India (RBI) on Wednesday prohibited Mastercard Asia from on-boarding any new domestic customers onto its card network. This would mean that Mastercard will not be able to issue any new cards to customers in India. In a statement, the central bank clarified that the action was a result of Mastercard’s failure to comply with RBI’s direction on Storage of Payment System Data.
Mastercard has now become the third major payment system operator to face such restrictions, after American Express Banking Corp and Diners Club International Ltd. As per the order, the restriction on Mastercard will come into place on July 22 of this year. There has been no response from the global payments service provider. The Reserve Bank’s decision will not have any impact on Mastercard’s existing customers. “Mastercard shall 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. Citing its circular on ‘storage of payment system data’ dated April 6, 2018, the RBI said all payment system operator providers were directed to ensure that the entire data related to their payment systems is stored on a system only in India.
The data in question included full end-to-end transaction details, customer information and payment instructions, among other key details. At the time, the RBI had granted payment system operators six months to comply with the circular. Payment system operators, including Mastercard, were also asked to report compliance to the RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor.
