Mastercard Ban Update: The Reserve Bank of India (RBI) on June 16, 2022, lifted the restrictions imposed on Mastercard. The Central bank had announced restrictions on Mastercard in 2021 for failing to comply with the local data storage norms. Under RBI Mastercard restrictions, the US-based payment gateway was barred from onboarding the new customers until it complies with the Storage of Payment System Data norms.
RBI while lifting the restrictions on Mastercard said, “In view of the satisfactory compliance demonstrated by Mastercard Asia/Pacific Pte Ltd…on Storage of Payment System Data, the restrictions imposed…on on-boarding of new domestic customers have been lifted with an immediate effect.”
RBI Mastercard Restrictions: When was the restriction announced on Mastercard?
The Reserve Bank of India has barred Mastercard Asia/Pacific Pete from onboarding new domestic customers (debit, credit, or prepaid) onto its card network from July 22, 2021.
RBI lifts restrictions on Mastercard Asia: Central bank statement
— Press Trust of India (@PTI_News) June 16, 2022
Mastercard on RBI ban: What was Mastercard’s response to lifting the restrictions?
While reacting to the news, Mastercard said, “We welcome and are grateful for today’s decision by the Reserve Bank of India, enabling us to resume onboarding of new domestic customers (debit, credit, and prepaid) onto our card network in the country, with an immediate effect. As we have in our engagement with the RBI, we reaffirm our commitment to support the digital needs of India, its people, and its businesses.”
RBI Mastercard Restrictions: Why was it imposed?
In July 2021, the Reserve Bank of India had indefinitely barred Mastercard from issuing any new credit or debit cards to domestic customers for violating data storage rules. The move was a major hit for the US-based company which had earlier commanded roughly 33 percent market share in India.
As per the Reserve Bank of India, Mastercard had not complied with the rules requiring foreign card networks to store data on the Indian payments exclusively in India.
Earlier in 2019, the Reserve Bank of India had come up with the storage payments system data and had mandated that for all the banks and service providers to store all the data relating to the payment systems in India.
RBI Mastercard Restrictions: Not the first time
The Reserve Bank of India’s action against Mastercard was not the first time that such restrictions had been imposed. In April 2022, the Central Bank had also imposed similar restrictions on the global card networking giants American Express Banking Corp and Diners Club International Ltd.
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