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RBI bars Mastercard from issuing new cards

ZT WEB DESK

Srinagar: Reserve Bank of India (RBI) on Wednesday prohibited Mastercard Asia from on-boarding any new domestic customers onto its card network. This would mean that Mastercard will not be able to issue any new cards to customers in India.

a statement, the central bank clarified that the action was a result of Mastercard’s failure to comply with RBI’s direction on Storage of Payment System Data.

Mastercard has now become the third major payment system operator to face such restrictions, after American Express Banking Corp and Diners Club International Ltd. Similar restrictions were slapped on the other two Payment System Operators on May 1st of this year.

As per the order, the restriction on Mastercard will come into place on July 22 of this year.

“Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data,” said a press statement issued by the RBI.

In the press statement, the RBI clarified that its order will not impact existing customers of Mastercard.

“Mastercard shall advise all card issuing banks and non-banks to conform to these directions. 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),” the RBI said.

 

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