RBI Lifts Curbs Imposed on American Express, Allows Onboarding of New Customers
The RBI, in 2021, had imposed restrictions on the credit card service for onboarding new domestic customers.
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The Reserve Bank of India (RBI) on Wednesday, 25 August, withdrew the restrictions on American Express Banking Corp and allowed the United States-based credit card service to onboard new customers following satisfactory compliance with data storage norms.
"In view of the satisfactory compliance demonstrated by American Express Banking Corp. with the Reserve Bank of India (RBI) circular dated April 6, 2018 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, in an order dated 23 April 2021, had restricted American Express Banking Corp from onboarding new domestic customers onto its card network from 1 May 2021 for non-compliance with RBI's rules on storage of payment system data.
As per the norms on Storage of Payment System Data issued in April 2018, "All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should 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, if any, the data can also be stored in the foreign country, if required."
The guidelines also required concerned entities to report compliance to the RBI and submit a board-approved system audit report conducted by a CERT-In empanelled auditor within the specified timelines.
In June, the RBI had lifted similar restrictions on Mastercard. The restrictions on Mastercard were imposed in July 2021.
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