Twitter
Advertisement

What is RBI's local data storage guidelines and how will it impact ATM card users

The home based companies have welcomed the RBI guidelines, however, global companies fear increase in their expenses for creation of local servers.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

The Reserve Bank of India had made it clear that it won't relax the October 15 deadline for global financial technology (fintech) companies to comply with its data localisation norms in the public interest. RBI in April gave six months to global payment companies to store transaction data of Indian customers within India. 

The RBI's data localisation norms will kick in from today. But what are these norms and how will it impact certain ATM card users? 

What is data localisation? 

Data localisation needs data about residents to be collected, processed, and stored inside the country, often before being transferred internationally, and usually transferred only after meeting local privacy or data protection laws.

The home based companies have welcomed the RBI guidelines, however, global companies fear increase in their expenses for creation of local servers.

What does global firms want?

A PTI report citing sources stated that global companies in recent meeting with the RBI proposed to provide mirror data instead of original data to which the central bank did not agree. 

What are RBI guidelines? 

The RBI in April said in order to ensure better monitoring of payment service operators it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers/ intermediaries/third party vendors and other entities in the payment ecosystem .

All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. 

The RBI further said data should include the full end-to-end transaction details, information collected/carried/ processed as part of the message/payment instruction. 

How will it impact ATM, Credit card users? 

The services of Master Card, Visa Card and American Express might get affected as these firms have declined to comply with RBI guidelines. Besides them, payment services of Facebook, PayPal, Amazon, Microsoft among other foreign firms might also be impacted. 

The reactions: 

Meanwhile, two top American Senators have said that India's the data localisation policy will be counterproductive to the country's efforts to modernise its framework regarding law enforcement requests for data and will adversely effect American businesses in India.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement