RBI Restricts Mastercard From Onboarding New Customers From July 22
Mastercard will not be allowed to bring new customers (debit, credit or prepaid) on its network from July 22 till further orders.
New Delhi: In a recent development, the Reserve Bank of India (RBI) on Wednesday imposed restrictions on Mastercard from onboarding new domestic customers on its network for non-compliance with 'directions on Storage of Payment System Data'.
According to the central bank, Mastercard will not be allowed to bring new customers (debit, credit or prepaid) on its network from July 22 till further orders.
However, the RBI said that the order will not impact existing customers of Mastercard and they can continue to use the services.
"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," said an RBI statement.
The decision comes months after RBI in April restricted American Express (AMEX) Banking Corp and Diners Club International Ltd from on-boarding new domestic customers onto their card networks for violating data storage norms.
The current order will not impact existing customers of Mastercard - a Payment System Operator authorized to operate a Card Network in the country under the PSS Act.
Under the order, Mastercard will have to advise all card-issuing banks and non-banks to conform to these directions.
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The supervisory action has been taken in the exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act).
In terms of the RBI circular on Storage of Payment System Data dated April 6, 2018, all system providers were directed to ensure that within a period of six months, the entire data (complete end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction) relating to payment systems operated by them is stored in a system only in India.
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 the timelines specified therein.
(With inputs from Piyush Pandey)
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