The Reserve Bank of India barred Mastercard from onboarding new customers after the latter failed to comply with data storage norms.
In a blow to Mastercard, the Reserve Bank on Wednesday barred Mastercard Asia Pacific from onboarding new credit, debit and prepaid card customers in India following the company's failure to comply with its data storage norms. The new rules are set to be applicable from July 22.
The RBI, however, clarified that the new rules will not impact existing Mastercard customers. It also asked Mastercard to advise all card-issuing banks and non-banks to conform to the new rules.
RBI said, "notwithstanding the 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 terms of its 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, as per the central bank.
Mastercards becomes the third major Payment System Operator on which restrictions have been imposed for non-compliance with RBI''s direction on Storage of Payment System Data.
Earlier, RBI had restricted American Express Banking Corp and Diners Club International Ltd from onboarding new domestic customers on to their card networks from May 1 for violating data storage norms.
In April 6, 2018, the RBI had directed all Payment System Providers to ensure that within a period of six months the entire data (full end-to-end transaction details/information collected / carried / processed as part of the message / payment instruction) 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 conducted by a CERT-In empanelled auditor within specified timelines.
(With inputs from PTI)