SUMMARY
The lifting of the restrictions means that American Express would be able to acquire new Indian customers for its card services
The central bank had imposed the restrictions in April last year for non-compliance with directions on storage of payment system data
In June this year, the RBI also lifted the restrictions it had imposed on Mastercard
The Reserve Bank of India (RBI) on Wednesday (August 24) lifted the business restrictions imposed on American Express after over a year, allowing the US-based company to acquire new domestic customers for its card services.
“In view of the satisfactory compliance demonstrated by American Express Banking Corp. with the Reserve Bank of India (RBI) circular…on Storage of Payment System Data, the restrictions imposed, vide order dated April 23, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement.
In April last year, the RBI had restricted American Express from onboarding new credit card customers in India from May that year due to non-compliance with the directions on storage of payment system data.
Besides American Express, the restrictions were also imposed on Diners Club International, which was later followed by such restrictions on Mastercard as well.
In June this year, the central bank finally lifted the restrictions on Mastercard.
According to the ‘Storage of Payment System Data’ directions, all foreign payment service providers need to ensure that the entire data relating to payment systems are stored in a system only in India. The data is also supposed to include the full end-to-end transaction details/ information collected/ carried/ processed as part of the message/ payment instruction.
For the foreign leg of the transaction, the data can be stored in the foreign country, if required.
Of late, the RBI has been aggressively coming out with regulations for the various players in the country’s digital ecosystem.
Earlier this month, the central bank released the first set of its much-awaited guidelines for digital lending in the country, which has imposed various restrictions on conduct and handling of data by RBI-registered digital lenders.
Earlier, the RBI also released its ‘Payments Vision 2025’ to increase digital transactions, while recently it also floated a discussion paper for charges on UPI and other payment systems.
