In a major supervisory action, the
Reserve Bank on Wednesday indefinitely barred the US-based
Mastercard from issuing new credit, debit and prepaid cards with effect from July 22 for its failure to comply with data storage norms.
Mastercard, a major card issuing entity in the country, is the third company to have been barred by
RBI from acquiring new customers after American Express Banking Corp and Diners Club International over data storage issue.
"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.
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 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".
Mastercard is a payment system operator authorised to operate a card network in the country under the Payment and Settlement Systems Act, 2007 (PSS Act).
In terms of RBI's circular on Storage of Payment System Data on April 6, 2018, all system providers were directed to ensure that within a period of six months the entire data relating to payment systems is stored 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 empanelled auditor within specified timelines.
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