RBI imposes restriction on Mastercard from on-boarding new domestic customers - (14 Jul 2021)
Banking
The Reserve Bank of India (RBI) has imposed restrictions on Mastercard Asia / Pacific Pte. Limited (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021. The entity has been found to be non-compliant with the directions on Storage of Payment System Data despite adequate opportunities being given. Mastercard is the third company barred by RBI from acquiring new customers after banning of American Express Banking Corp and Diners Club International over data storage issue.
However, this order will not impact existing customers of Mastercard. The supervisory action has been taken in exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act). Mastercard is a Payment System Operator authorised to operate a Card Network in the country under the PSS Act. In recent times, there has been considerable growth in the payment ecosystem in the country. These systems are also highly technology dependent, which necessitate adoption of safety and security measures on a continuous basis.
In terms of RBI Circular on Storage of Payment System Data dated April 6, 2018, all System Providers were 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. They were 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.
Tags : SUPERVISORY ACTION RESTRICTIONS MASTERCARD
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