Business

Banks to stop issuing new cards on Mastercard network from July 22 after RBI ban

  • The Reserve Bank of India (RBI) pulled the plug on Mastercard over non-compliance with instructions on ‘Storage of Payment System Data’.
By hindustantimes.com | Edited by Kunal Gaurav, Hindustan Times, New Delhi

PUBLISHED ON JUL 21, 2021 09:37 PM IST

The Reserve Bank of India (RBI) ban on Mastercard Asia Pacific to onboard new debit, credit score or pay as you go card clients will come into impact from Thursday. India’s central financial institution pulled the plug on Mastercard over non-compliance with instructions on ‘Storage of Payment System Data’ which mandates all system suppliers to retailer complete knowledge of home clients relating to cost programs solely in India.

“Mastercard shall advise all card issuing banks and non-banks to conform to these directions,” the RBI stated.



In April 2018, the RBI issued a round notifying all cost networks to retailer knowledge domestically, together with end-to-end transaction particulars, and knowledge collected, carried, and processed as a part of the message or cost instruction. The financial authority additionally directed the businesses to report compliance and submit an audit report performed by a CERT-In empanelled auditor “within the timelines specified therein.” The central financial institution initially gave firms six months to adjust to the instructions.

“Notwithstanding 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 RBI stated in a launch final week.

Mastercard is the third main cost system operator to face restrictions for non-compliance with RBI’s native knowledge storage guidelines. The RBI had imposed comparable restrictions on American Express Banking Corp and Discover Financial Services’ Diners Club card from May 1 for violating knowledge storage norms. While Mastercard has been barred from onboarding new clients from July 22, the restrictions is not going to affect current clients.

Mastercard has a 33% share in India as in opposition to Visa’s 45%. Reports recommend {that a} ban on Mastercard is probably going to create a monopoly of Visa in India’s bank card market since indigenous Rupay stays a serious participant solely within the debit card market.

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