RBI bans Mastercard from issuing credit and debit cards in India
By Leandra Monteiro
The Reserve Bank of India (RBI) imposed restrictions on Mastercard from onboarding new domestic debit, credit or prepaid customers on its card network. The ban on Mastercard issuing new cards takes effect on 22 July.
The Reserve Bank of India has accused the global payments company of violating data storage laws. RBI said Mastercard had not complied with rules requiring foreign card networks to store data on Indian payments exclusively in India.
“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,” the central bank said in a statement, according to media reports. This order will not impact existing cardholder and customers of Mastercard. The company shall advise all card-issuing banks and non-banks to conform to these directions, the statement added.
The step follows in the wake of India’s central bank barring American Express (AXP.N) and Diners Club International, owned by Discover Financial Services (DFS.N), from issuing new cards due to similar violations, less than three months ago.
The order comes as companies such as Mastercard and Visa also face growing competition from domestic payments network Rupay, which has been promoted by Prime Minister Narendra Modi. The RBI directive in 2018 sparked an aggressive lobbying effort from U.S. companies, which said the rules would increase their infrastructure costs and hit their global fraud detection platforms, but the central bank did not relent.
IBSi Daily News Analysis
September 29, 2023
Banking is becoming byte-sized with rise of Embedded Finance, Temenos study showsRead More
IBSi FinTech Journal
- Most trusted FinTech journal since 1991
- Digital monthly issue
- 60+ pages of research, analysis, interviews, opinions, and rankings
- Global coverage
Other Related News
September 29, 2023