The RBI in an order issued on Friday, imposed restrictions on American Express Banking Corp and Diners Club International Ltd from onboarding new domestic customers onto their card networks from May 1, stating that the said entities have been found non-compliant with the directions on Storage of Payment System Data. It also said that this order will not impact the existing customers.

The RBI’s circular on Storage of Payment System Data (April 6, 2018) had directed all Payment System Providers to ensure that the entire data associating with payment systems operated by them is stored in a system in India within six months. They are also obligated to report compliance to the RBI and submit a board-approved System Audit Report (SAR) conducted by a CERT-In impaneled auditor within the timelines defined there. American Express Banking Corp and Diners Club International Ltd are Payment System Operators (PSOs) authorized to operate Card Networks in the country under the Payment and Settlement Systems Act, 2007 (PSS Act). The RBI, in a statement, told that the supervisory action has been taken in exercise of powers vested in it under Section 17 of the PSS Act.

Besides American Express Banking Corp and Diners Club International Ltd, India has three other card payment networks – MasterCard Asia/ Pacific Pte Ltd, Singapore; National Payments Corporation of India; and Visa Worldwide Pte Limited, Singapore.