The Reserve Bank of India (RBI) on Wednesday imposed restrictions on Mastercard Asia / Pacific Pte Ltd (Mastercard) from onboarding new domestic debit, credit or prepaid customers on its card network. The ban on Mastercard issuing new cards takes effect on 22 July.
The action has been against the payment system operator for violating RBI’s norms on the storage of payment systems data.
“Notwithstanding the 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,” the central bank said in a statement.
This order will not impact existing customers of Mastercard. Mastercard shall advise all card-issuing banks and non-banks to conform to these directions, the statement added.
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), the RBI said.
Mastercard is a Payment System Operator authorised to operate a Card Network in the country under the PSS Act.
The move comes less than three months after the RBI barred American Express and Diners Club International, owned by Discover Financial Services, from issuing new cards due to similar violations.
The central bank directive in 2018 sparked an aggressive lobbying effort from US firms who said the rules would increase their infrastructure costs and hit their global fraud detection platforms, but the RBI did not relent.
The order comes as firms such as Mastercard and Visa also face growing competition from domestic payments network Rupay, which has been promoted by PM Narendra Modi.
Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!
