August 04, 2021

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Why RBI restricted Mastercard to issue new domestic customers

Why RBI restricted Mastercard to issue new domestic customers

 

 

 

The Reserve Bank of India (RBI) has imposed restrictions on Mastercard Asia/Pacific Pte. Ltd. (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021.

 

 

Why RBI restricted Mastercard to issue new domestic customers?

 

 

RBI said, “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.”

 

 

 

However, the Central Bank added that this 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).

Mastercard is a Payment System Operator authorised to operate a Card Network in the country under the PSS Act.

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Violation of norms on storage of payment systems data

 

 

In terms of RBI circular on Storage of Payment System Data dated April 6, 2018, all System Providers were directed to ensure that within a period of six months the entire data (full end-to-end transaction details/ information collected/ carried /processed as part of the message/payment instruction) relating to payment systems operated by them is stored in a system only in India.

 

They were also required to report compliance to RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor within the timelines specified therein.

 

 

Post source : Agency

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