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MUMBAI : The Reserve Bank of India (RBI) on Wednesday lifted restrictions on the global card network American Express after more than 15 months, allowing it to onboard customers, citing “satisfactory compliance".
On 23 April 2021, RBI said American Express Banking Corp. cannot onboard new domestic customers from May. The regulator cited non-compliance with a 2018 circular on storing payment system data. Two other large corporations, Diners Club and Mastercard were also asked to stop issuing cards in 2021. Subsequently, RBI allowed the card networks to start issuing new cards.
“In view of the satisfactory compliance demonstrated by American Express Banking Corp… restrictions imposed, vide order dated 23 April 2021, on the onboarding of new domestic customers have been lifted with immediate effect," it said. Sanjay Khanna, interim chief executive and chief operating officer, American Express Banking Corp., India, welcomed RBI’s decision and said India is a key strategic market for American Express. The decision to lift the ban, Khanna said, is the result of the company’s significant local investments in technology, infrastructure, and resources.
“American Express’ ability to deliver best-in-class value and customer experiences will enable us to meet the increasing demand for premium products and services and grow our business in India," he said.
In its notification from April 2018, RBI had mandated card networks to store all payment data from India in the country, which was initially opposed by many companies but eventually, they had to comply.
Data to be stored in India includes end-to-end transaction details and information pertaining to payment or settlement transactions.
Clarifying on its April 2018 circular, the central bank said in June 2019 that while there is no bar on processing payment transactions outside India, the data shall be stored only in India after processing.
“In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier. The same should be stored only in India," it had said.