RBI bars Mastercard from issuing new cards from July 22

RBI bars Mastercard from issuing new cards from July 22

 

In a major supervisory action, the Reserve Bank on Wednesday indefinitely barred the US-based Mastercard from issuing new credit; debit as well as prepaid cards with effect from July 22 for its failure to comply with data storage norms.

 

Mastercard, a major card issuing entity in the country; is the third company to have been barred by RBI from acquiring new customers after American Express Banking Corp as well as Diners Club International over data storage issue.

 

“The Reserve Bank of India (RBI) has today imposed restrictions on Mastercard Asia/Pacific Pte. Ltd. (Mastercard); from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021,” the central bank said in a statement.

 

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The RBI, however, clarified that its supervisory action will not impact the services of the existing customers of Mastercard in the country.

 

Announcing the ban on Mastercard, RBI said, “not withstanding 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”.

 

Mastercard is a payment system operator authorised to operate a card network in the country; under the Payment and Settlement Systems Act, 2007 (PSS Act).

 

In terms of RBI’s circular on Storage of Payment System Data on April 6, 2018; all system providers were directed to ensure that within a period of six months the entire data relating to payment systems is stored only in India.

 

They were also required to report compliance to RBI; as well as submit a board-approved System Audit Report conducted by a CERT-In empanelled auditor within specified timelines.

About The Author

Osigweh Lilian Oluchi is a graduate of the University of Lagos where she obtained a B.A (Hons) in English, Masters in Public and International affairs (MPIA). Currently works with 1stnews as a Database Manager / Writer. [email protected]

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