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US trade official criticized India’s decision to ban Mastercard

US trade official criticized India’s decision to ban Mastercard
A senior US trade official has described India’s decision to ban Mastercard from issuing new cards as a “draconian move that caused panic”.

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US trade official criticized India’s decision to ban Mastercard

A senior US trade official has described India’s decision to ban Mastercard from issuing new cards as a “draconian move that caused panic”.  Citing non-compliance with 2018 rules that required it to store payments data only India, the Reserve Bank of India announced a ban, effective from July 22, to prevent the US giant from issuing new cards.




According to Reuters, the ban triggered a flurry of emails between US officials in Washington and India as they discussed next steps with Mastercard, including approaching the RBI. Brendan A. Lynch, the deputy assistant US trade representative for South and Central Asia       , wrote on July 16, that they have started hearing from stakeholders about some pretty draconian measures that the RBI has taken over the past couple of days.

“It sounds like some others (Amex, Diners) may have been impacted by similar actions recently,” wrote Lynch. He asked his colleagues in India to get in touch with their central bank contacts to see what’s going on. Lynch told colleagues the understanding was that the RBI has info they need and are hopeful that they will respond appropriately. “But as the ban approached, if the RBI doesn’t change course, I’m sure the panic will resume.”

A Mastercard spokesman told Reuters they have had very constructive engagements with the Indian and US governments over the past few weeks and appreciate the support of both. “This includes discussions with the RBI, and Mastercard has made good progress as it looks to resolve the situation quickly,” he said. The RBI imposed the ban after deciding a system audit report submitted by Mastercard’s auditor Deloitte in April was unsatisfactory. Sources said the RBI was concerned Deloitte’s audit did not clearly state how long Mastercard took to purge Indian’s card data that is processed abroad before being stored locally.


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Mastercard highlighted that Deloitte performed a supplemental audit and a new report was submitted on July 20 to the RBI, six days after the ban was imposed. “We look forward to continuing our conversations with the RBI and reinforcing how seriously we take our obligations. We are hopeful that this latest filing provides the assurances required to address their concerns,” the company had said.


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