The Reserve Bank of India (RBI) has allowed American Express to take on new customers effective immediately after the US-based credit card company complied with RBI data retention regulations.
“In light of American Express Banking Corp.’s satisfactory compliance with the Reserve Bank of India’s (RBI) Circular of 6 April 2018 regarding the storage of payment system data. the restrictions were imposed, see order of April 23, 2021, for the onboarding of new customers in Germany have been lifted with immediate effect,” says a statement from the banking supervisory authority.
The RBI last year imposed restrictions on American Express from adding new domestic customers to its card network beginning May 1, 2021, for failing to comply with the regulator’s data retention norms.
This comes two months after the Central Bank lifted restrictions on Mastercard Asia Pacific Pte. Ltd., which enables the American financial services company to issue new debit and credit cards in the country.
Mastercard was the third US card network to be blocked from adding new customers by the RBI. The banking regulator had prohibited Diners Club International and Amex from onboarding new customers from May 1, 2021.
While the RBI lifted restrictions on Diners Club in November 2021, the ban on adding new customers has applied to Amex until now.
RBI data retention guidelines issued in 2018 state that all system providers must ensure that all data of the payment systems they operate are stored in one system only in India. This data includes full end-to-end transaction details, information collected, transmitted and processed as part of the payment instruction.
It can be observed that not all system providers store the payment data in India. To ensure better oversight, it’s important to have full supervisory access to data stored at these scheme providers, as well as at their service providers, intermediaries, third-party vendors and other entities in the payment ecosystem, the regulator said in April 2018, giving card networks six months to monitor these to comply with standards.
Meanwhile, American Express welcomed the central bank’s decision to lift restrictions on adding new domestic customers to India. “We are committed to providing our customers with access to world-class services, experiences and valuable insights that enrich lives and drive business success,” says the card issuer.
In June, the Reserve Bank of India increased the limit on recurring payments from ₹5,000 to ₹15,000 to facilitate larger transactions such as insurance premiums and education fees. It also proposed linking credit cards to UPI, starting with the RuPay credit card. This agreement is expected to provide customers with more options and convenience while making payments through the UPI platform.
