Reserve Bank Lifts Business Restrictions Imposed On American Express

The ban was imposed with effect from May 2021 due to non-compliance on storage of payment system data

The RBI had imposed restrictions on American Express Banking Corp. from on-boarding new domestic customers onto its card network from May 1, 2021 for non-compliance with the RBI circular on Storage of Payment System Data.

Source : Getty

The Reserve Bank of India on Wednesday has lifted business restrictions on new customer acquisition by American Express, citing satisfactory compliance demonstrated by the entity to RBI rules.

The ban was imposed with effect from May 2021 due to non-compliance on storage of payment system data.

“In view of the satisfactory compliance demonstrated by American Express Banking Corp. with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, vide order dated April 23, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the central bank said in a release.

The RBI said that they were also required to report compliance to RBI and submit a Board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified therein.

The central bank had, by order dated April 23, 2021, imposed restrictions on American Express Banking Corp. from on-boarding new domestic customers onto its card network from May 1, 2021 for non-compliance with the RBI circular dated April 6, 2018 on Storage of Payment System Data, according to the release.

American Express Banking Corp. is a Payment System Operators authorised to operate card networks in India under the Payment and Settlement Systems Act, 2007 (PSS Act).

Similar curbs were imposed earlier on Diners Club International. Ban on Diners Club was lifted in November 2021, while the restrictions on Mastercard were removed in June.

On June 16, 2022, the banking regulator had lifted the restrictions imposed on Mastercard citing improvement compliance. The RBI had imposed curbs on Mastercard Asia/Pacific Pte. Ltd. from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021 for non-compliance with the RBI circular dated April 6, 2018 on Storage of Payment System Data.

Other than Mastercard, others such as Visa, American Express, and Diners Club have been also needed to store Indian payments data locally since October, 2018. This was done to provide RBI “unfettered supervisory access”.