India has lifted restrictions on Mastercard after the payments giant demonstrated “satisfactory compliance” with local South Asian market data storage rules, the central bank said on Thursday.
In a series of measures last year, the Reserve Bank of India indefinitely banned Mastercard, American Express and Diners Club from issuing new debit, credit or prepaid cards to customers for failing to comply with local data storage rules (PDF). Trade restrictions on American Express and Diners Club remain in place in the country, although they are allowed to continue serving their existing customer base.
“In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated 6 April 2018 on the storage of payment system data, the restrictions imposed, see the order dated July 14, 2021, to the onboarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement on Thursday.
Unveiled in 2018, local data storage rules require payment companies to store all Indian transaction data on servers in the country. Visa, Mastercard and several other companies, as well as the US government, had previously called on New Delhi to reconsider its rules, which they said were designed to allow the regulator “unfettered access to oversight”.
Mastercard has identified India as a key growth market and has invested over $2 billion in the country over the past decade.
The resumption of Mastercard’s operations in India will give a boost to local banks and fintechs, which for a year have only been able to offer their customers debit and credit cards powered by Visa and Rupay, a network card system promoted by the National Payments Corporation of India, a special agency of RBI.
This is a developing story. More soon…
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