RBI bars Amex, Diners Club from adding new customers

FILE - Data to be stored exclusively in India include complete end-to-end transaction details; information collected, carried and processed as part of the message or payment instruction (AP) — FILE - Data to be stored exclusively in India include complete end-to-end transaction details; information collected, carried and processed as part of the message or payment instruction **(AP)**

2 min read . Updated: 23 Apr 2021, 08:03 PM IST Shayan Ghosh

Mumbai: The Reserve Bank of India (RBI) on Friday restricted global card networks American Express Banking Corp. and Diners Club International Ltd from onboarding new customers, citing non-compliance of local payment data storage norms.

“This order will not impact existing customers," the regulator said.

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American Express Banking Corp. and Diners Club International Ltd. are payment system operators authorized to operate card networks in India under the Payment and Settlement Systems Act, 2007 (PSS Act). The ban on adding of new customers will be effective 1 May, RBI said on Friday.

Through its circular on Storage of Payment System Data in April 2018, the central bank had directed all payment system providers to ensure that their entire data on payment systems 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 (SAR) within the timelines specified. RBI had asked payment service providers to comply with the regulations within six months and report compliance by 15 October 2018.

Data to be stored exclusively in India include complete end-to-end transaction details; information collected, carried and processed as part of the message or payment instruction. According to the April 2018 circular, the audit report approved by the board was supposed to be submitted by 31 December 2018.

“In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers, intermediaries, third party vendors and other entities in the payment ecosystem," RBI had said while issuing directions in 2018.

Some entities like WhatsApp had to adhere to this regulation before launching their payments product. Mint had reported in August 2020 that the National Payments Corp. of India (NPCI) has informing RBI that the messaging platform has met data localization requirements. Following this, the company rolled the payments service a few months later.

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