Reserve Bank of India Stops Mastercard from Issuing New Cards to Domestic Customers

Mastercard will be barred from issuing cards to customers in India indefinitely, following claims of data violation.

India’s central bank has blocked Mastercard from issuing new debit or credit cards to domestic customers, which will take effect on 22 July.

The Reserve Bank of India (RBI) has accused the company of violating data storage laws, the BBC reports.

RBI said Mastercard had not “complied with rules” requiring foreign card networks to store data on Indian payments exclusively in India.

The global payments service provider has not responded to the claims.

The central bank said the payments service provider had “violated” a 2018 order directing payments data to be stored in India. This would allow the regulator “unfettered supervisory access” to payment details.

“Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data,” the RBI said in a notification.

The BBC added that US-based payment service providers have lobbied in earnest against the 2018 directive, saying such a move would increase their costs of doing business in India. But the central bank however has not relented.

In a broadcast report, BBC’s Sameer Hashmi investigated the claims and found that “skimming” and “online theft” were the most common types of card fraud. In the report, Hashmi also spoke to a debit card fraud victim who impugned the banks for not “taking care” of his money, feeling helpless in his financial security.

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