On Thursday, India’s central bank announced that it has lifted all restrictions on financial company Mastercard, adding that the company had shown satisfactory compliance with the South Asian market’s local data storage rules.
The new development is a win for Mastercard. Last year, India’s central bank – the Reserve Bank of India blocked Mastercard, as well as American Express and Diners Club from issuing new debit, credit, or prepaid cards to customers. The central bank said the aforementioned companies failed to comply with local data storage rules.
Mastercard can continue with issuing new debit, credit, or prepaid cards to customers thanks to the latest development. “In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated April 6, 2018, on Storage of Payment System Data, the restrictions imposed, vide order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement on Thursday.
The restrictions on American Express and Diners Club, however, remain in place in India. These companies notwithstanding have the permission to continue to serve their existing customers in the country.
The local data-storage rules were unleashed back in 2018. They require payment companies such as Mastercard to store all Indian transaction data within servers in the country. As expected, payment companies such as Mastercard and Visa, and even the US Government argued that the rules should be reconsidered as they were designed to allow the Indian regulator to have unhindered supervisory access.
Mastercard held about 33 percent of the market share in India before the ban. Mastercard knows the value India has as the world’s second-largest market and recognizes the country as a region for key growth. The company has invested more than $2 billion in India to date.
Mastercard’s resumption isn’t just a win for the company. The new development will help boost the operations of local banks and fintech companies that have only been able to provide cards powered by Visa and India’s Rupay.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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