Non-compliance of data by MasterCard in the given time frame is the reason behind its ban in India. RBI said that it has given considerable time and adequate opportunities’ to fall in line with its April 2018 circular on the subject of localized data storage in India.
The RBI has sent out a strong signal to global financial majors that international businesses must follow the law of the land in letter & spirit. RBI barred global payments systems provider MasterCard from Wednesday after the lapsed deadline. Master card is the world’s second-largest credit card provider after Visa cards; whose market share in India is around a third of total debit and credit cards in circulation. However, the RBI made no bones about the said card provider for non-compliance even after ‘considerable time and adequate opportunities’ to meet its April 2018 circular on local data storage.
Several factors still hinder monetary transmission to bank rates: RBI
Although, the RBI had asked foreign banks for an approved system audit report on compliance with its local data storage norms, which MasterCard and others have miserably failed to meet even after three years. Earlier, RBI has barred players like Diners Club & American Express and show the way that its message is loud & clear on compliance with data localization.
Meanwhile, data localization holds enough significance amid rising cyber frauds and electronic spying at companies including domestic players like Mobikwik and Unacademy, where the data of customers is usually put for sale on the dark web. Data localization is important to avoid financial frauds, but foreign banks avoid it citing their centralization practices. The RBI maintains that while storing data locally, they can transmit data to their foreign centers for 24 hours for analysis.
