RBI Lifts Restrictions On Mastercard In India
Mastercard now free to issue cards in India, says RBI.
Reserve Bank of India has removed the restrictions placed on Mastercard Asia/Pacific Pte Ltd for non-compliance with its data localisation guidelines. The card network can now once again issue new cards to customers in India.
On July 14, 2021, the RBI had restricted Mastercard from on-boarding new customers as it had not met the requirements under the regulator's data storage and localisation guidelines. The RBI had not specified which specific guidelines were not complied with.
The restrictions were effective from July 22, 2021.
The bar on Mastercard issuing fresh cards in India had affected its relations with card issuers in India, specifically banks which relied on it. Private sector lender RBL Bank was one of the most impacted as most of its credit cards were issued on the Mastercard network.
The banking regulator had also taken strict action against international card companies such as American Express and Diners Club, restricting them from taking on new customers. These restrictions were also linked to the data storage and localisation guidelines of the RBI.
Restrictions on Diners Club were eventually lifted in November last year, however, those on American Express continue.
The data storage norms, issued in April 2018, had directed all system providers to ensure that data relating to payment systems operated by them is stored in India. Additionally, system providers had to also get a board-approved system audit conducted by a CERT-In empanelled auditor.