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RBI limits AmEx, Diners Club from taking new customers from May 1
The central bank said they have violated directions on Storage of Payments System Data and also clarified that the order and restraint on the expansion of the network will not impact existing customers.
The Reserve Bank of India (RBI) on Friday restricted American Express Banking Corp and Diners Club International Ltd from onboarding new domestic customers onto their card network from May 1. The central bank said they have violated directions on Storage of Payments System Data and also clarified that the order and restraint on the expansion of the network 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 central bank said in a statement. RBI exercised the power vested in it under Section 17 of the PSS Act to take the supervisory action, the statement added.
Giving the background on the supervisory action taken, RBI said that all the Payment System Providers were directed to ensure the storage of the entire data relating to payment systems operated by them in a system operated only in the country. Additionally, they were also required to submit a Board-approved System Audit Report (SAR) and report compliance to the federal bank, as per a circular dated 2018.
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“In terms of RBI circular on Storage of Payment System Data dated April 6, 2018, all Payment System Providers were directed to ensure that within a period of six months the entire data (full 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,” RBI said in the statement.
“They were also required to report compliance to RBI and submit a Board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified therein,” the statement added.
