New Delhi: Reserve Bank of India (RBI) has banned master card Asia Pacific excluded new credit, debit and prepaid card customers from July 22 as it failed to comply with data storage norms.
The US-based network is the second largest credit card issuer in India (after Visa) and the RBI’s stance could have an impact on foreign relations. The central bank has been pushing regulated entities to store data related to Indian customers on Indian soil since April 2018.
Here is an explainer:
Mastercard is not the only one under RBI’s radar
Mastercard is the third card network to be banned by RBI this year after American Express and dinner club Similarly, in April, there was a ban on the addition of new customers. This leaves out Visa and RuPay as the only card networks allowed to take in new customers.
Data Storage Rules (2018)
The data storage rule enforced in 2018 states that payment system providers store entire payment data only in systems located in India, except for processing cross-border payments. Data sent abroad for processing must be deleted abroad within the stipulated time frame and stored in India only.
MasterCard’s response
“While we are disappointed with the stance taken by RBI in their communication dated 14 July, we will continue to work with them to provide any additional details necessary to address their concerns. Based on our significant and continued investments in India, we are committed to working with our customers and partners to drive the government forward. Digital India vision,” Mastercard said.
effect?
The RBI order will not have any impact on existing customers of MasterCard. Also, most banks are unlikely to be affected as they often have relationships with multiple networks and thus can continue to issue debit and credit cards using Visa or RuPay networks.
Why the impact on RBL Bank?
RBL Bank on Thursday said its credit card issuance rate would be affected. The lender currently only issues credit cards on the MasterCard network.
However, the bank expects to start issuing credit cards on the Visa payment network after the technology integration, which is expected to take 8 to 10 weeks.
(with inputs from agencies)
The US-based network is the second largest credit card issuer in India (after Visa) and the RBI’s stance could have an impact on foreign relations. The central bank has been pushing regulated entities to store data related to Indian customers on Indian soil since April 2018.
Here is an explainer:
Mastercard is not the only one under RBI’s radar
Mastercard is the third card network to be banned by RBI this year after American Express and dinner club Similarly, in April, there was a ban on the addition of new customers. This leaves out Visa and RuPay as the only card networks allowed to take in new customers.
Data Storage Rules (2018)
The data storage rule enforced in 2018 states that payment system providers store entire payment data only in systems located in India, except for processing cross-border payments. Data sent abroad for processing must be deleted abroad within the stipulated time frame and stored in India only.
MasterCard’s response
“While we are disappointed with the stance taken by RBI in their communication dated 14 July, we will continue to work with them to provide any additional details necessary to address their concerns. Based on our significant and continued investments in India, we are committed to working with our customers and partners to drive the government forward. Digital India vision,” Mastercard said.
effect?
The RBI order will not have any impact on existing customers of MasterCard. Also, most banks are unlikely to be affected as they often have relationships with multiple networks and thus can continue to issue debit and credit cards using Visa or RuPay networks.
Why the impact on RBL Bank?
RBL Bank on Thursday said its credit card issuance rate would be affected. The lender currently only issues credit cards on the MasterCard network.
However, the bank expects to start issuing credit cards on the Visa payment network after the technology integration, which is expected to take 8 to 10 weeks.
(with inputs from agencies)
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