India's massive #MastercardJolt: Data sovereignty war on?
India's massive #MastercardJolt: Data sovereignty war on?
Way back in April 2018, the company was instructed to store the data of a payment system providers in a system only in India within a period of six months. On failing to do so, RBI has taken action against them.
The Reserve Bank of India (RBI) imposed restrictions on MasterCard making it unable to grant cards to new domestic customers from July 22. All three categories of debit, credit and prepaid will be unavailable to customers who want to opt for the MasterCard. According to the RBI, the action was taken because MasterCard failed to comply with the central bank’s norms on storage of payment systems data.
“Notwithstanding the 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 the RBI. It added, however, that the decision will not affect existing users of the card. Banks and non-banks alike need to conform with the RBI’s direction.
No sooner did the central bank barred the American Express and Diners Club from adding new domestic customers from May 1 this year than the same followed suit with MasterCard. HDFC bank also ended up similarly before that. Way back in April 2018, the company was instructed to store the data of a payment system providers in a system only in India within a period of six months. Since they failed, the RBI took action against them.
This is a measure taken to ensure that all payment system operators store or localise their end-to-end transaction data in the country, said RBI’s founding director, Kazim Rizvi. 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.
