The Reserve Bank of India has barred American Express and Diners Club from onboarding new domestic credit card customers from May 1 for violating the central bank's norms on storage of payment systems data.
Through a circular in April 2018, RBI had asked payment system providers 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.
Besides, 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.
However, RBI said American Express Banking Corp and Diners Club International Ltd were found to be non-compliant with the directions on storage of payment system data.
Accordingly, RBI "imposed restrictions on American Express Banking Corp. and Diners Club International Ltd. from on-boarding new domestic customers onto their card networks from May 1, 2021".
However, the order will not impact the existing customers of the company.