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RBI lifts restriction on 16-month old ban on American Express

For breaking its new "Storage of Payment System Data" guideline in May of last year, the RBI had placed restrictions on American Express Banking Corp.

Maitry Kothari

Updated : Aug 26, 2022, 07:41 PM IST | Edited by : Maitry Kothari

RBI lifts restriction on 16-month old ban on American Express

The Reserve Bank of India(RBI) on Wednesday lifted restrictions on a 16-month old ban on American Express Banking Corp and allowed them to issue cards to their domestic customers after the company compiled with the central bank’s data localization & storage policy. The curbs on American Express were imposed by the Central Bank for not following the direction on Storage of Payment System Data effective May 1, 2021.

"In view of the satisfactory compliance demonstrated by American Express Banking Corp with the Reserve Bank of India (RBI) circular... on Storage of Payment System Data, the restrictions imposed... on onboarding of new domestic customers have been lifted with immediate effect," the RBI said in the release.

The policy imposed by the central bank made it compulsory for all payment system providers to ensure that their entire data, consisting of full end-to-end transaction details, information collected, carried, processed as part of the message, payment instruction, etc., relating to payment systems operated by them is stored in a system only in India. They were also required to report compliance to RBI and submit a board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within a specified time.

The central bank policy’s objective was to “ensure better monitoring” of the operations of these entities. RBI needed “unfettered supervisory access to data stored with these system providers also with their service providers, intermediaries, third party vendors and other entities in the payment ecosystem”, RBI said in April 2018 while issuing the directives.

American Express welcomed the RBI's move.“We welcome today’s decision by the Reserve Bank of India, which enables American Express Network to onboard new customers effectively immediately. India is a key strategic market for American Express and today's decision is the result of our significant local investments in technology, infrastructure, and resources," Hindustan Times's sister publication LiveMint quoted Sanjay Khanna, interim CEO and COO at American Express, as saying.

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RBI lifts restriction on 16-month old ban on American Express

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