The Reserve Bank of India (RBI) has banned US-based Mastercard from issuing new debit and credit cards with effect from July 22.
The action comes after the RBI banned payment system operator MasterCard, barring it from on-boarding new domestic customers.
What did RBI say?
“Mastercard will advise all card issuing banks and non-banks to comply with these instructions,” RBI said.
In April 2018, RBI issued a circular asking all payment networks to store data locally, including end-to-end transaction details, and collected, carried and processed as part of messages or payment instructions information is included.
The monetary authority also directed the companies to report compliance and submit an audit report conducted by CERT-in empaneled auditors.
The central bank had initially given companies six months to comply with the instructions.
“Despite considerable time lapse and adequate opportunity being given, the entity has been found not to comply with the directions for storage of payment system data,” RBI said in a release last week.
Mastercard is the third major payment system operator to face sanctions for non-compliance with RBI’s local data storage rules.
The RBI had imposed similar restrictions from May 1 on American Express Banking Corp and Discover Financial Services’ Diners Club cards for violating data storage norms.
Whereas MasterCard has been barred from adding new customers from July 22.
Will existing Mastercard customers also be affected?
However, let us tell you that even though the Reserve Bank of India is currently banning MasterCard, this ban will not affect the existing customers in any way.