Press "Enter" to skip to content

RBI lifts business restrictions imposed on Mastercard – Moneycontrol

(File image)

The Reserve Bank of India (RBI) on June 16 lifted the restrictions imposed on Mastercard citing improvement compliance.

“In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, vide order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the RBI said.

The RBI had, on July 14, 2021, imposed restrictions 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.

In July last year, while imposing restrictions on Mastercard, the RBI had cited certain rule violations.

The RBI said Mastercard cannot onboard new domestic customers onto its card network from July 22, 2021. The restriction applied to debit, credit or prepaid customers. Mastercard must advise all card-issuing banks and non-banks to conform to these directions.

The RBI said Mastercard was non-compliant with directions on Storage of Payment System Data.

On April 6, 2018, the RBI said it had observed that not all system providers stored payments data in India. There had been considerable growth in the payment ecosystem in the country, it said. Such systems were also highly technology dependent, which necessitated the adoption of best-in-class safety and security measures on a continuous basis, the RBI had said.

The central bank said system providers must ensure that all data related to payment systems operated by them are stored in a system only in India.

This data should include complete end-to-end transaction details and information collected, carried and processed as part of the message and payment instructions. The RBI added that for the foreign leg of transactions, if any, the data can also be stored in the foreign country, if required.

Since the RBI directive requiring on-soil storage of domestic payment transaction data was issued in 2018, Mastercard has provided consistent updates and reports regarding its activities and compliance with the required stipulations, the company had said in its response.

“While we are disappointed with the stance taken by the RBI in their communication dated July 14, we will continue to work with them to provide any additional details required to resolve their concerns. Building on our considerable and continued investments in India, we remain committed to working with our customers and partners in advancing on the government’s Digital India vision,” Mastercard had said in a statement.

In April, 2021, the RBI asked American Express Banking Corp. and Diners Club International Ltd. not to onboard new domestic customers onto their card networks from May 1, 2021, citing non-compliance with the directions on Storage of Payment System Data.