Mastercard Can Add New Customers in India, RBI Says

Mastercard can add new customers in India after that country’s central bank determined the company was in compliance with data-storage regulations.

As Bloomberg reported Thursday (June 16), the decision comes nearly a year after the Reserve Bank of India placed its restrictions on Mastercard.

Learn more: RBI Tells Mastercard To Stop Onboarding New Card Customers In India

“We welcome and are grateful for today’s decision by the Reserve Bank of India (RBI), enabling us to resume onboarding of new domestic customers (debit, credit, and prepaid) onto our card network in the country with immediate effect,” Mastercard said in a statement. “As we have in our engagement with the RBI, we reaffirm our commitment to support the digital needs of India, its people, and its businesses.”

The RBI announced its ban in July of last year, saying the action was taken under the Payment and Settlement Systems Act, 2007 (PSS Act), which gives permission to Mastercard to operate a card network in India.

Soon after the ban, Brendan A. Lynch, deputy assistant U.S. trade representative for South and Central Asia, criticized the decision, calling it “draconian” and saying it caused a panic.

“We’ve started hearing from stakeholders about some pretty draconian measures that the RBI has taken over the past couple days,” Lynch said.

RBI has said Mastercard and other card companies were guilty of breaking local data storage rules, which make it so foreign card networks must store Indian payments data locally for “unfettered supervisory access.”

Read more: Mastercard Targeting Southeast Asia, Latin America Expansion

In the wake of the ban — and its suspension of operations in Russia — Mastercard said it was focusing its attention on other parts of the globe, saying last month it saw Southeast Asia and Latin America as targets for growth

“Southeast Asia is exciting (due to) the right demographics, the adoption of technology and digitization, and governments’ focus on financial inclusion,” Co-President for International Markets Ling Hai said in May.