wordpress blog stats
Connect with us

Hi, what are you looking for?

RBI blocks American Express and Diners Club from on-boarding new customers

The Reserve Bank of India (RBI) imposed business sanctions on American Express and Diners Club, two major global card networks, for violations with the regualtors’ data localisation norms. This is the first time the central bank has imposed business sanctions against card network companies and payment operators in India due to non-compliance with the data storage norms.

On Thursday, the RBI barred Amex and Diners from on-boarding new Indian customers from May 1, 2021 onward. “These entities have been found non-compliant with the directions on Storage of Payment System Data. This order will not impact existing customers. 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).”

Back in April 2018, the RBI introduced new data storage or data localisation norms on payment companies. Under these new rules, all domestic customer transaction data had to store data in servers located in India. Only based on certain exceptions and under some conditions, could the data be transferred and used abroad. Foreign and domestic payments companies would have to provide a compliance certificate based on an IT system audit to the RBI, to continue their operations.

While the RBI made certain exceptions for large foreign firms to comply with the data localisation rules, three years later some large entities are still languishing behind. In the case of WhatsApp Pay, a payments service on the Unified Payments Interface (UPI) network, the RBI intervened in the approval process and asked that auditors conduct more checks to ensure that specific data was not being stored by the company abroad.

A spokesperson for American Express said, via email, that they are in regular dialogue Reserve Bank of India about data localisation requirements and have demonstrated their progress towards complying with the regulation.

Advertisement. Scroll to continue reading.

“While we’re disappointed that the RBI has taken this course of action, we are working with them to resolve their concerns as quickly as possible. This does not impact the services that we offer to our existing customers in India, and our customers can continue to use and accept our cards as normal”–American Express

According to RBI data as of February 2021, American Express had close to 1.6 million credit cards in India with Rs 2,324 crore in cards spends at point-of-sale terminals. Diners Club has operated in India since 2011, through a tie-up with HDFC Bank.

In December 2019, the RBI imposed sanctions on HDFC Bank and barred the bank from on-boarding any new credit card customers. It also ordered a third-party IT audit of the bank’s entire infrastructure in light of several technical outages and system downtimes at the bank in the last few years.

Also Read

Written By

Reports on banking, payments, fintech and crypto-curencies. Additional reporting on media regulations, data protection and other areas.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.


When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.


The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.


In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...


By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

You May Also Like


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ