Reserve Bank of India (RBI) has banned Mastercard from issuing new debit cards, credit cards, or prepaid cards to customers over disobedience with local data storage rules. The South Asian market’s central bank has said the new restrictions will go into effect from July 22, 2021. RBI said that (via Reuters) “Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity is noncompliant with the directions on Storage of Payment System Data.”
RBI said that the new order is not going to impact the existing customers of Mastercard, which is one of the top three card issuers in India. It also said, “Mastercard shall advise all card-issuing banks and non-banks to conform to these directions”. According to a recent report from Bloomberg, RBL Bank, Yes Bank, Bajaj Finserv are the most impacted by Mastercard restrictions.
It is not happening for the first time, India’s central bank has also penalized a firm for noncompliance with local data-storage rules, which were unveiled in 2018 and mandated compliance within six months. The rules require payments firms to store all Indian transaction data within servers in the country.
Mastercard and Visa also face growing competition from domestic payments network Rupay, which has been promoted by Prime Minister Narendra Modi.
So, this is all about it. Let us know your opinion on this in the comment section and stay tuned for more updates.