Saturday, March 2, 2024
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Mastercard banned in India, RBI prohibited from issuing new cards

MUMBAI: (Monitoring Desk) Mastercard banned in India. Beginning next week, India’s central bank will prohibit global payments firm Mastercard from adding new clients, escalating a lengthy spat over local data storage restrictions. Mastercard was found in violation of the Central Bank of India’s (RBI) April 2018 circular, which mandated that all payments data be maintained entirely in India and that the Bank statements are available to regulators with unrestricted regulatory access.

Data localization has been contested by global payment service companies such as Mastercard, Visa, and American Express, citing higher costs as a justification.Despite the passage of significant time and many opportunity, the entity (Mastercard) has been deemed to be non-compliant with the Storage Payment System Data instructions, the RBI said in a warning.

From July 22, Mastercard will no longer be able to issue debit, credit, or prepaid cards to clients in India. Existing Mastercard customers will not be affected, according to the central bank. Mastercard did not react to AFP’s questions right away.. According to London-based payments firm PPRO, Mastercard contributed for 33% of all card banking in India last year.

For the same reasons, the RBI stopped American Express and Diners Club Worldwide from issuing new cards to clients permanently beginning in May.

Global payment card firms are facing rising competition from India’s United Payments Interface (UPI) operations, which use phone numbers and QR codes to enable card-less and cashless payment options. There were 2.8 billion UPI expanded the supply 5.5 trillion rupees ($73.8 billion) in June.

Why Mastercard banned in India?

Mastercard is found in the violation of the Central Bank of India’s (RBI) April 2018 circular, which mandated that all payments data be maintained entirely in India and that the regulator have “unrestricted regulatory access” to bank transaction. Mastercard fought against data localization, citing higher costs as a reason due to Mastercard banned in India.