Indian Central Bank Bars MasterCard from issuing new cards from July 22, 2021

The Indian Central Bank, the Reserve Bank of India, which is the overall regulator of all sorts of banking products in India, including Debit Card and Credit Card products, has notified a new set of orders which would affect the operations of MasterCard in India.

a group of credit cards in a pocket of jeans

A new order to this effect was issued on July 14, 2021.

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As you can read in the order, all Payment System Providers were notified to localise all their data in India. Now, MasterCard Asia Pacific Ltd, has been barred from issuing new debit/credit/prepaid cards in India from July 22, 2021, onwards. This move is exactly on the same lines as how action was earlier initiated against American Express and Diners Club networks in India earlier on, and only leaves card issuing banks with the option of Visa and RuPay for the time being.

Unfortunately, this will affect the business of many banks and financial institutions in India. Most banks tend to tie-up with just one network, unless you are massive like HDFC Bank and then you are partners with all of them. And with Amex and Diners Club, the catch was they were just credit card issuers, with MasterCard, it is a key player in the Indian Debit Card space as well. So while banks can take a timeout to issue credit cards with the other network (Visa, etc.), one won’t expect them to stop taking on banking business and issue ATM cards to these users. And Prepaid cards play a big role in the incentives economy.

Not just that, remember, HDFC Bank is still in the penalty box and barred from issuing cards to new customers.

MasterCard issued a statement in reaction to RBI’s directions. MasterCard said,

Mastercard is fully committed to our legal and regulatory obligations in the markets we operate in. Since the issuance of the RBI directive requiring on-soil storage of domestic payment transaction in 2018, we have provided consistent updates and reports regarding our activities and compliance with required stipulations.

While we are disappointed with the stance taken by the RBI in their communication dated July 14, we will continue to work with them to provide any additional details required to resolve their concerns.

What do you think of RBI’s new move to disallow MasterCard from issuing new cards in India?

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About Ajay

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe. Ajay is a frequent contributor and commentator on the media as well, including ET Now, BBC, CNBC TV18, NDTV, Conde Nast Traveller and many other outlets.

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  1. Why do I feel like the regulator is clearing the playing field for Rupay? They better keep an alternative to Infinite/World Elite ready in that case!

    • One would feel that way if they don’t understand why US and EU have implemented the data localization.

      • Agree on this. Canada has their own system called Interac.
        Still everyone has to piggy bag on to Visa, MC or Discover, etc. network for international transactions.

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