Homefinance News

RBI bars American Express, Diners Club from adding new customers over non-compliance of data storage norms

RBI bars American Express, Diners Club from adding new customers over non-compliance of data storage norms

RBI bars American Express, Diners Club from adding new customers over non-compliance of data storage norms
Profile image

By CNBCTV18.com Apr 23, 2021 10:37:07 PM IST (Updated)

Reserve Bank of India has barred American Express and Diners Club International from on-boarding new credit card customers in India over non-compliance of storage of payment system data. The ban will come into effect on May 1.

Recommended Articles

View All

The central bank said in a statement that supervisory action is being taken in exercise of powers vested in RBI under Section 17 of the PSS Act. The central bank clarified that the order will not impact existing customers.
"These entities have been found non-compliant with the directions on Storage of Payment System Data. This order will not impact existing customers.
American Express Banking Corp and Diners Club International Ltd are Payment System Operators authorised to operate Card Networks in the country under the Payment and Settlement Systems Act, 2007 (PSS Act).
The supervisory action has been taken in exercise of powers vested in RBI under Section 17 of the PSS Act," the statement read.
RBI had issued a circular in April 2018 on Storage of Payment System Data, directing all payment system providers to ensure that within a period of six months the entire data (end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction) relating to payment systems operated by them is stored in a system only in India.
They were required to report compliance to RBI and submit a board-approved System Audit Report (SAR) conducted by a CERT-in empanelled auditor within the specified timeline.
American Express issued a statement saying, "We have been in regular dialogue with the Reserve Bank of India about data localization requirements and have demonstrated our progress towards complying with the regulation. While we’re disappointed that the RBI has taken this course of action, we are working with them to resolve their concerns as quickly as possible. This does not impact the services that we offer to our existing customers in India, and our customers can continue to use and accept our cards as normal."
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Most Read

Market Movers

View All
Top GainersTop Losers
CurrencyCommodities
CompanyPriceChng%Chng