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The Reserve Bank of India has indefinitely banned Mastercard from issuing new debit, credit or prepaid cards to customers in the South Asian market for failing to comply with local data storage rules.
The central bank of the South Asian market said the new restrictions would go into effect on July 22. RBI said in a statement Wednesday.
The new order will not impact existing customers of Mastercard, which is one of the top three card issuers in India, RBI said. “Mastercard should advise all issuing and non-bank banks to comply with these instructions,” he said.
This isn’t the first time India’s central bank has penalized a company for failing to comply with local data storage rules, which were unveiled in 2018 and mandated compliance within six months. The rules require payment companies to store all Indian transaction data on servers around the country.
In April, RBI barred American Express and Diners Club from adding new customers, citing a violation of the same rules.
Visa, Mastercard and several other companies, as well as the US government, have already called on New Delhi to reconsider its rules, which they say are designed to allow the regulator “unimpeded access to surveillance.”
Visa, Mastercard and American Express had also pushed to either drastically change the rules or drop them altogether.
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