Restrictions are imposed on American Express Banking Corp and Diners Club International Ltd from on-boarding new domestic customers onto their card networks, by the Reserve bank of India from May 1, 2021. RBI in a statement said that these entities have been found non-compliant with the directions on storage of payment system data. However, it also added that the order will not impact existing customers. According to RBI circular dated April 6,2018 on storage of payment system data, all payment system providers were directed to ensure that within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
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.They were also required to report compliance to the RBI and submit a Board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified therein.
American Express via a circular said that they have been in regular dialogue with the Reserve Bank of India about data localisation requirements and have demonstrated their progress towards complying with the regulation. And that they were disappointed because of RBI’s course of action. American express is working with them to resolve their concerns as quickly as possible. This does not impact the services that is offered to their existing customers in India, and the customers can continue to use and accept their cards as they normally do.
Smrutirekha Bhoi