21 Jul RBI bans Mastercard from issuing new cards in India

RBI bans Mastercard from issuing new cards in India

Context

According to the RBI, the U.S. card-issuer has failed to comply with the local data storage rules announced by the central bank in 2018.

RBI’s data localization policy

1. Card companies such as Visa, Mastercard, and American Express to store all Indian customer data locally
2. Companies  required to comply with these rules within six months.
3. Reason: Local storage of consumer data is necessary to protect the privacy of Indian users and also to address national security concerns

Developments

1. Mastercard, Visa and other foreign card companies have lobbied to dilute the rules.
2. RBI banned Mastercard from issuing new cards to customers from July 22.
3. Recently, American Express and Diners Club International were also banned by the RBI from issuing new cards after they failed to comply with the 2018 circular.
4. Exception: Existing Mastercard customers, however, can continue to use their cards.
5. Indian banks that are currently enrolled in the Mastercard network are expected to make alternative arrangements with other card companies.

Concerns

1. Individual Privacy concerns
2. Data ownership

Download Yojna IAS Daily Current Affairs of 21st July 2021

rahul123

Yojna IAS Current Affairs Team