RBI bans Mastercard from onboarding new customers in India

The Reserve Bank of India today announced that starting from July 22, 2021, It will prohibit Mastercard Asia/Pacific Pte. Ltd. (Mastercard) from onboarding new domestic consumers (debit, credit, or prepaid) onto its card network.

Despite the passage of time and many opportunities, the entity was found to be in violation of the directives on Payment System Data Storage.

"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,” RBI said in a statement Wednesday.

Existing Mastercard customers will not be affected by this directive, said RBI. All card-issuing banks and non-banks will be advised to follow these guidelines, it adds. The Reserve Bank of India has used its authorities under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act) to take supervisory action.

According to the RBI circular on Payment System Data Storage dated April 6, 2018, all System Providers must ensure that 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 within six months.

They were also expected to notify RBI of their compliance and submit a Board-approved System Audit Report conducted by a CERT-In impaneled auditor within the timeframes stated in the report.

Previously, This has been imposed on American Express, and Discover Financial Services-owned Diners Club International for violating the data storage rules. Mastercard is third on the list of the major payment system operator on which restrictions have been imposed.

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