India bans Mastercard from adding new customers

Reserve Bank of India has indefinitely barred Mastercard from issuing new debit, credit, or prepaid cards to customers in the South Asian market over noncompliance with local data storage rules.

The South Asian market's central bank said the new restrictions will go into effect on July 22. Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data," RBI said in a statement Wednesday.

The new order won't impact existing customers of Mastercard, which is one of the top three card issuers in India, RBI said. Mastercard shall advice all card issuing banks and non-banks to conform to these directions," it said.

This isn't the first time India's central bank has penalized any firm for noncompliance with local data-storage rules, which was unveiled in 2018 and mandated compliance within six months. The rules require payments firms to store all Indian transaction data within servers in the country.

In April, RBI restricted American Express and Diners Club from adding new customers, citing violation of the same rules.

Visa, Mastercard and several other firms, as well as the U.S. government, have previously requested New Delhi to reconsider its rules, which they have argued is designed to allow the regulator unfettered supervisory access."

Visa, Mastercard and American Express had also lobbied to either significantly change the rules or completely discard it.