MUMBAI, INDIA – For breaking data storage laws, the Reserve Bank of India (RBI) blocked Mastercard Inc from issuing new debit, credit, or prepaid cards to domestic consumers indefinitely on Wednesday, striking a blow to the American business in a major market. The RBI stated in a statement that Mastercard had failed to comply with data storage guidelines enacted in 2018, which require foreign card networks to keep Indian payment data locally so that the regulator has “unrestricted supervisory access.”
“Despite a significant period of time passing and many opportunities being provided, the company (Mastercard) was determined to be non-compliant with the guidelines,” the RBI stated.
A request for comment from Mastercard was not immediately returned. The prohibition will go into force on July 22. Mastercard’s existing clients would not be affected by the RBI’s decision, and the corporation should instruct all card-issuing banks in India to comply with the directive, according to the RBI. The move comes less than three months after India’s central bank stopped American Express and Discover Financial Services’ Diners Club International from issuing new cards owing to similar infractions.
The RBI regulation in 2018 provoked a fierce lobbying push from American businesses, which claimed the rules would raise infrastructure costs and harm their worldwide fraud detection platforms, but the central bank refused to budge.
The ban comes as domestic payments network Rupay, which has been supported by Prime Minister Narendra Modi, is gaining ground on companies like Mastercard and Visa.
(Euan Rocha and Aditya Kalra contributed reporting.)
Mark Potter edited the piece.)/n
