RBI has barred Mastercard from onboarding new domestic customers (debit, credit or prepaid) onto its network from July 22.
In a major blow to payment services major Mastercard, the Reserve Bank of India (RBI) on Wednesday indefinitely barred Mastercard Inc from issuing new debit or credit cards to domestic customers. The restrictions were imposed on the on-boarding of new domestic customers in the country for violation of data storage rules.
The RBI said that in spite of a 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.
In a notification, the RBI said Mastercard had not complied with data storage rules from 2018 that require foreign card networks to store Indian payments data "only in India" so the regulator can have "unfettered supervisory access," adding that "Notwithstanding lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions."
What does it mean for banks?
Several private sector banks including HDFC Bank, ICICI Bank, Yes Bank, RBL Bank have tie-ups Mastercard for debit and credit cards. So banks will not be able to issue new cards on the Mastercard network anymore.
RBI has also asked Mastercard to advise the banks and non-banks issuing its cards to conform to these directions.
What does it mean for customers?
If you hold a Mastercard credit or debit card, there is no need to worry. The RBI has made it clear that the latest order will only apply to the new customers and existing customers can continue to use it without any issues. “This order will not impact existing customers of Mastercard," the central bank said.
Why did RBI go hard on Mastercard?
As per the RBI circular on storage of payment system data dated April 6, 2018, all system providers were directed to ensure that within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
They were also required to report compliance to the RBI and submit a board-approved system audit report conducted by a CERT-In empanelled auditor within the timelines specified therein.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "mastercard")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}