India’s central bank takes supervisory action on Mastercard
In a press announcement last week, India’s central bank, the Reserve Bank of India (RBI) has imposed restrictions on Mastercard from onboarding new domestic customers onto its card network from July 22, 2021, which includes debit, credit or prepaid cards.
RBI has noted that despite giving ample time to Mastercard to act on its directive, it found that the company has been non-compliant with the directions on Storage of Payment System Data. While this order does not affect the existing customers on Mastercard’s network. It has also been noted by the RBI that Mastercard should ‘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). The RBI in its circular on Storage of Payment System Data dated back in April 2018 had directed all system providers 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’.
Back in April 2021, the RBI had taken similar action against American Express Banking Corp. and Diners Club International Ltd and imposed restrictions from onboarding new domestic customers onto their card networks from May 1, 2021.