RBI banned Mastercard from issuing new cards in India

The RBI has banned Mastercards from issuing new, debit, credit or prepaid cards in India from July 22 citing non-compliance of ‘Storage of Payment System Data’ directions.

Mastercard is the second largest credit card issuer after Visa in India and the central bank’s tough stance could have implications on foreign relations. The data storage rules from 2018 require foreign card networks to store Indian payments data only in India. Data sent abroad for processing should be deleted abroad and stored only in India.

Several private sector lenders including HDFC Bank, YES Bank, ICICI Bank, RBL Bank have tie-ups Mastercard for credit and debit cards. So banks will not be able to issue new cards on the Mastercard network anymore. “Matercards shall advice all card issuing banks and non-banks to conform to these directions”, added RBI.

Replying to RBI’s order, Mastercard said that it will continue to work with the regulator to provide 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”, the company said.

Earlier RBI barred American Express Banking Corp., Diners Club International Ltd., from on boarding new domestic customers onto their card networks from May 1. However, the current order will not affect the existing Mastercards users.