The India Central Bank has lifted its restrictions on Mastercard issuing new cards in the domestic market, nearly a year after imposing the ban, after it demonstrated “satisfactory compliance” with the local data storage rules.
Indian Central Bank lifts Mastercard issuing ban
In a series of moves last year, the Reserve Bank of India indefinitely barred Mastercard, American Express and Diners Club from issuing new debit, credit or prepaid cards to customers over non-compliance with local data storage rules.
The business restrictions on American Express and Diners Club remain in place in the country, though they are permitted to continue to serve their existing customer base.
“In view of the satisfactory compliance demonstrated by Mastercard Asia Pacific with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, via order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement on Thursday.
Unveiled in 2018, the local data-storage rules require payments firms to store all Indian transaction data within servers in the country. Visa, Mastercard and several other firms, as well as the US government, previously requested New Delhi to reconsider its rules, which they argued were designed to allow the regulator “unfettered supervisory access.”
Mastercard, which prior to the ban commanded roughly 33% market share in India, has identified the world’s second largest market as a key growth region and has invested over $2 billion in the country over the past decade.
“We welcome and are grateful for today’s decision by the Reserve Bank of India (RBI), enabling us to resume onboarding of new domestic customers (debit, credit and prepaid) onto our card network in the country with immediate effect,” a Mastercard spokesperson said in a statement.
“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. We are glad we have met this milestone and will continue to ensure ongoing delivery against the goals and regulatory requirements that have been established.”
RuPay, Visa and Mastercard are the three largest players in Indian market.
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