Reserve Bank of India (RBI) on Thursday lifted restrictions on MasterCard, allowing new customers to network the card for debit, credit or prepaid cards, citing compliance with the company’s payment data storage rules.
The trade restrictions were lifted almost a year after the central bank imposed the sanctions. RBI said that after demonstrating “acceptable compliance” with local data storage regulations, it is once again allowing the card giant to add new consumers to the Indian market.
It should be noted that the RBI last year indefinitely barred Mastercard, American Express and Diners Club from issuing new debit, credit or prepaid cards to customers for non-compliance with local data storage requirements.
However, American Express and Diners Club’s trade restrictions remain in place in India while they are allowed to continue serving their existing customer base.
The central bank’s statement reads: “In view of the satisfactory compliance demonstrated by Mastercard Asia/Pacific Pte., with the Reserve Bank of India’s (RBI) circular dated April 6, 2018 on collection of payment system data, on-boarding of new domestic customers But the restrictions imposed by the Order dated 14th July, 2021 are immediately withdrawn. With effect.”
Local data-storage requirements, which were announced in 2018, force payment companies to maintain all Indian transaction data on servers in the country. They were also expected to inform RBI of their compliance and submit a Board-approved Systems Audit Report (SAR) prepared by a CERT-in-paneled auditor within the indicated time frame.
Entire end-to-end transaction details, information collected, transmitted and processed as part of the message, and payment instructions were among the data that needed to be retained in India.
But the US government, along with Mastercard, Visa and several other companies, had asked the central government to reconsider their guidelines, which it claimed were intended to give the regulator “unfettered supervisory access”.
Mastercard, which had around 33% market share in India before the ban, has chosen the world’s second largest market as a priority growth destination, investing over $2 billion in the country over the past decade.
Mastercard said in a statement: “We welcome and appreciate today’s decision of the RBI, which has enabled us to reintroduce new domestic customers (debit, credit and prepaid) to our card network in the country with immediate effect.” Got it.”
It added: “We reaffirm our commitment to supporting the digital needs of India, its people and its businesses. We are delighted that we have met this milestone and will continue to ensure consistent delivery against the targets set and regulatory requirements.”
The statement also noted that India is an important market for the company, both in terms of innovation and the value it provides to its customers and partners.
“We take great pride in being able to contribute to the government’s vision of a Digital India and will continue to invest in the future of the country with the same passion and dedication as we have always had.”
The resumption of MasterCard’s business in the country will benefit local banks and fin-techs, who are only able to offer customers debit and credit cards powered by Visa and RuPay, a domestic card promoted by the National Payments Corporation of India. is network. A special body of RBI, since last one year.
Last year, many banks became wary of trading restrictions imposed on the global card giant. Since most of their cards were issued on Mastercard’s network, the ban had the biggest impact on Yes Bank, RBL Bank and HDFC Bank.
Following the ban, banks that issued these cards were forced to switch to alternative networks, although the ban on MasterCard caused an immediate delay in the number of cards issued by these players. For example, RBL Bank rushed to switch to Visa and the process took weeks to complete.
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