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RBI Restricts MasterCard From Onboarding New Customers From July 22.

The Apex bank of India RBI has imposed restrictions on MasterCard Asia / Pacific Pte. Ltd. (MasterCard) from onboarding new domestic customers (debit, credit, or prepaid) onto its card network from July 22, 2021.

The reason stated in its press release was “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”.

His order will not impact existing customers of MasterCard. MasterCard shall advise all card-issuing banks and non-banks to conform to these directions.

The supervisory action has been taken in the exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act).

MasterCard is a Payment System Operator authorized to operate a Card Network in the country under the PSS Act.

In terms of the RBI circular on Storage of Payment System Data dated April 6, 2018, all System Providers were directed 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 impaneled auditor within the timelines specified therein.

MasterCard isn’t the first but Earlier, RBI had also restricted American Express Banking Corp and Diners Club International Ltd from onboarding new domestic customers onto their card networks from May 1 over the non-compliance with RBI’s direction on storage of payment system data.

What do you think?

Written by Ravi Tilekar


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