The Reserve Bank of India has indefinitely barred MasterCard from issuing new debit, credit or prepaid cards to customers in the South Asian market for non-compliance with local data collection rules.
The central bank of the South Asian market said the new restrictions would be effective from July 22. “Despite considerable time lapse and adequate opportunity given, the entity does not comply with the instructions on storage of payment system data, RBI said in a statement on Wednesday.
RBI said the new order will not affect existing customers of Mastercard, which is one of the top three card issuers in India. “Mastercard will advise all card issuing banks and non-banks to comply with these instructions,” it said.
This is not the first time India’s central bank has penalized a firm for non-compliance with local data-storage rules, which were unveiled in 2018 and mandated compliance within six months. The rules require payment firms to store all Indian transaction data within servers in the country.
In April, the RBI banned American Express and Diners Club from adding new customers, citing violations of the same rules.
Visa, Mastercard and several other firms as well as the US government have previously urged New Delhi to reconsider its rules, which they argue are designed to allow “unfettered supervisory access” to the regulator.
Visa, MasterCard and American Express also lobbied for significant changes to the rules or to abandon them altogether.