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RBI allows Diners Club to onboard new customers, lifts curbs imposed in April

By Priyanka Verma 
Updated Date

The Reserve Bank of India (RBI) on Tuesday lifted restrictions on global card network Diners Club International Ltd, allowing it to onboard new customers after it demonstrated “satisfactory compliance”.

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On 23 April, Diners Club and American Express Banking Corp were restricted from issuing fresh cards due to non-compliance with local payment data storage norms. Interestingly, the regulator is yet to lift the restrictions on American Express. The ban on adding of new customers was effective 1 May.

RBI also restricted Mastercard from onboarding new customers from 22 July for failing to comply with its data localiation norms. That is also in effect at the moment.

“In view of the satisfactory compliance demonstrated by Diners Club International Ltd with the Reserve Bank of India (RBI) circular dated 6 April 2018 on storage of payment system data, the restrictions imposed, vide order dated 23 April 2021, on on-boarding of fresh domestic customers have been lifted with immediate effect,” the regulator said in a statement posted on its website on Tuesday.

Through its circular on Storage of Payment System Data in April 2018, the central bank had directed all payment system providers to ensure that their entire data on payment systems is stored in a system only in India. They were also required to report compliance to RBI and submit a board-approved system audit report (SAR) within the timelines specified. RBI had asked payment service providers to comply with the regulations within six months and report compliance by 15 October 2018.

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Data to be stored exclusively in India include complete end-to-end transaction details; information collected, carried and processed as part of the message or payment instruction. According to the April 2018 circular, the audit report approved by the board was supposed to be submitted by 31 December 2018.

“In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers, intermediaries, third party vendors and other entities in the payment ecosystem,” RBI had said while issuing directions in 2018.

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