Strict ban on adding new customers to MasterCard from July 22
The Reserve Bank of India (RBI) took major action on Mastercard on Wednesday. Under this, the company will no longer be able to add new customers to its network from July 22, which includes domestic debit, credit or prepaid card customers.
According to RBI, Mastercard has violated its norms on storage of payment system data in India, for which action has been taken against the payment system operator. However, the order will not have any impact on existing MasterCard customers.
What are the RBI norms, which Mastercard did not meet?
Let us inform that RBI in its order has directed all card issuing banks and non-banks to follow the instructions. According to the RBI circular issued in April 2018, all payment system providers were asked to ensure that their complete data related to the payment system (such as transaction details among other requirements) operated by them within a period of six months And only one system has stores in India. Action has been taken against Mastercard for not meeting these criteria.
Last year, Mastercard accounted for 33% of all card payments in India, according to London-based payments start-up PPRO quoted by AFP news agency.
In 2019, the firm announced an investment of a billion dollars over the next five years as part of its expansion plans in India.Earlier this year, American Express and Diners Club were blocked from issuing new cards due to similar violations.US-based payment service providers have lobbied aggressively against the 2018 directive, saying such a move would increase their costs of doing business in India.But India’s central bank has not relented.