In a blow to credit and debit card vendor MasterCard, the Reserve Bank of India (RBI) has indefinitely banned the firm from issuing new credit, debit, or prepaid cards to domestic customers, following a row between the national authority and the company over the the rules pertaining to storage of data.
The RBI notified its move, saying that MasterCard Inc. had failed to comply to the guidelines from 2018, wherein foreign card networks to store personal data taken from Indian users on local databases, to aid “unfettered supervisory access. ”
The statement made by the Reserve Bank of India read, “Notwithstanding lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions.” The ban will come into effect starting July 22.
However, existing MasterCard users can rest assured that the ban will not affect the functioning of their cards. The RBI’s statement further holds, “Mastercard shall advice all card issuing banks and non-banks to conform to these directions.”
Less than three months ago, the RBI, the central banking authority in India, had put similar bans on American Express and Diners Club International, owned by Discover Financial Services, over violations that were quite identical in nature to that by MasterCard.
The directives issued by the authority back in 2018 had invited widespread protests from the US card firms, which had argued that the move would bring in increased costs and also have an adverse effect on their international fraud detection networks.
One might think that the violation on MasterCard’s part, and the ban on the RBI’s part, will work in favor of PM Modi and the Central Government, who have been briskly promoting home-grown alternatives like the Rupay Card.
