India bans Mastercard from adding new customers over data storage breach

The Reserve Bank of India (RBI) has banned US financial services company Mastercard Inc from issuing new credit and debit cards to Indian customers for violation of data storage rules.

The RBI said Mastercard had violated the country’s data storage law, which bans foreign card networks from keeping Indian payments data outside India.

“Notwithstanding the lapse of considerable time and adequate opportunities being given, [Mastercard] has been found to be non-compliant with the directions,” the regulator said in a statement on Wednesday.

Indian laws obligate all card networks operating in the country to store transaction data “only in India” and to let authorities have “unfettered supervisory access.”

Mastercard said it was “disappointed” with the RBI's ban, alleging it has given regular updates on its compliance with Indian regulations on payment data storage ever since they were passed in 2018.

“We will continue to work with [RBI] to provide any additional details required to resolve their concerns,” the company said in an official reply.

The ban applies to both debit and credit cards Mastercard issues. It is due to come into force on July 22. It will not affect existing Mastercard customers in India, the regulator noted.

The measure follows similar steps recently taken by Indian authorities against two more globally recognized card networks, American Express and Diners Club International.

India is currently putting high hopes in its domestic payments network, Rupay, increasingly promoted by Prime Minister Narendra Modi.

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