Mastercard has been banned from issuing new cards in India

By Michelle Toh, CNN Business

Mastercard has been ordered to stop taking new customers in India, as authorities there say it violated the country’s rules on how data should be stored.

Starting next Thursday, the company will be banned from issuing new debit, credit or prepaid cards, according to the Reserve Bank of India (RBI). It did not stipulate how long the restrictions would last.

In a statement Wednesday, the central bank said that Mastercard had been given “considerable time and adequate opportunities” to comply with a mandate announced in 2018.

That measure requires all payment providers to store data on Indian users and transactions only on locally based servers. Companies were given six months to comply with the mandate at the time.

The RBI didn’t immediately respond to a request for comment about why its action against Mastercard was coming now.

In its order Wednesday, the RBI said that Mastercard should direct all card-issuing banks “to conform” to the new restrictions.

The move will not impact the company’s existing customers.

In response to a query from CNN Business, Mastercard declined to share its number of users in the country.

But it stressed that “there is no impact to our current operations in India,” and said the company “is fully committed to our legal and regulatory obligations in the markets we operate in.”

Mastercard added that it had “worked closely” with the central bank over the past three years in efforts to comply with requirements.

“While we are disappointed with the stance taken … we will continue to work with them and provide any additional details needed to resolve their concerns,” it said.

This isn’t the first time India has imposed such restrictions.

In April, the RBI placed similar curbs on American Express over the same issue.

American Express said at the time that it had been “in regular dialogue” with Indian authorities and “demonstrated our progress towards complying with the regulation.”

The company told CNN Business there was “no update” to its statement on Thursday.

Data privacy concerns are on the rise around the world, leading to heightened pressure on companies to store their data locally.

In China, Tesla recently set up a new facility to store local user information as the automaker faced scrutiny over whether its cars there could ever be used for spying.

China’s extraordinary clampdown on Didi, meanwhile, has focused on allegations that the ride-hailing company has mishandled sensitive data about its users in China.

— Diksha Madhok contributed to this report.

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