The Reserve Bank of India (RBI) has imposed restrictions on Mastercard Asia (Mastercard) from on-boarding new domestic customers (debit, credit, or prepaid) onto its card network from July 22, 2021.
Mastercard is a payment system operator authorised to operate a card network in the country under the Payment and Settlement Systems Act, 2007 (PSS Act).
The company has been found to be non-compliant with the directions on ‘storage of payment system data’ in spite of the considerable time and adequate opportunities being given.
According to the RBI’s press release, this order will not impact existing customers of Mastercard. The company is asked to 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).
As per the RBI circular on Storage of Payment System Data dated April 6, 2018, all system providers are 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.
The companies are also required to report compliance to RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor within the timelines specified therein.
After receiving RBI’s notice, Mastercard issued a response late on July 14.
“Mastercard is fully committed to our legal and regulatory obligations in the markets we operate in. Since the issuance of the RBI directive requiring on-soil storage of domestic payment transaction data in 2018, we have provided consistent updates and reports regarding our activities and compliance with the required stipulations. While we are disappointed with the stance taken by the RBI in their communication dated July 14, we will continue to work with them to provide any additional details required to resolve their concerns. Building on our considerable and continued investments in India, we remain committed to working with our customers and partners in advancing on the Government’s Digital India vision,” it said in a statement.
Download Money9 App for the latest updates on Personal Finance.