The Reserve Bank of India (RBI) on Thursday lifted the ban imposed on Mastercard and permitted the card network to onboard new customers for debit, credit, or prepaid cards, as it is satisfied with its compliance with the storage of payment data norms, reported Business Standard.
The embargo on the company is being lifted almost a year after it was imposed in July last year. The move will benefit lenders, such as YES Bank and RBL Bank, which were solely issuing Mastercard cards before the ban. Citi also partnered only with Mastercard for its credit cards before the ban.
“In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the RBI circular dated April 6, 2018 on storage of payment system data, the restrictions imposed, vide order dated July 14, 2021, on onboarding of new domestic customers have been lifted with immediate effect,” the RBI said on Thursday.
Mastercard, said in a statement, welcomed the decision. “As we have in our engagement with the RBI, we reaffirm our commitment to support the digital needs of India, its people and its businesses. We are glad we have met this milestone and will continue to ensure ongoing delivery against the goals and regulatory requirements that have been established” it said.
“India is an important market for us, both in terms of the innovation created here and the value we deliver to our customers and partners,” it said.
While there is no official data on the market share of these card networks in India, industry estimates suggest Visa has around 44 per cent market share, followed by Mastercard with 36 per cent, and Rupay with 20 per cent.
The ban on Mastercard impacted YES Bank, RBL Bank, and HDFC Bank the most as a majority of their cards were issued on Mastercard’s network. Following the embargo, these card-issuing banks had to move to other networks but there was an immediate slowdown in the run rate of cards issued by these players with the embargo imposed on Mastercard.