The Reserve Bank of India has imposed restrictions on American Express Banking Corp. and Diners Club International Ltd. from onboarding new domestic customers onto their card networks from May 1. “These entities have been found non-compliant with the directions on storage of payment system data. This order will not impact existing customers,” the Reserve Bank said on Friday.
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.
As per the terms of RBI circular on Storage of Payment System Data of 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.
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.
Meanwhile, American Express in a statement said, “We have been in regular dialogue with the Reserve Bank of India about data localisation 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.”
Source: Read Full Article