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RBI Restricted American Express, Diners Club from Enrolling New customers from May 1, 2021

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RBI restricts American Express, Diners ClubOn April 23, 2021, The Reserve Bank of India (RBI) has restricted American Express Banking Corp (Amex) and Diners Club International Ltd, the payment system operators from on-boarding new domestic customers onto their card networks from May 1, 2021, due to the non-compliance with the directions on Storage of Payment System Data.

  • American Express and Diners Club are authorized to operate card networks in India under the Payment and Settlement Systems Act, 2007 (PSS Act). Thus the current restrictions will not impact the existing customers.
  • The supervisory action has been taken in exercise of powers vested in RBI under Section 17 of the PSS (Payment and Settlement Systems) Act.

About RBI’s Regulation over Storage of payment system data:

In April 2018, RBI has made certain regulation under PSS Act for the storage of payment system data to payment system providers such as,

  • Directed to store all the data related to payment systems with in 6 months (full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction) in a system only in India (within October 2018).
  • Also required to submit a board-approved System Audit Report (SAR) conducted by a Computer Emergency Response Team (CERT-In) empanelled auditor (within December 2018).

Reports of Motilal Oswal Financial Services (MOFSL)

As per the Motilal Oswal Financial Services (MOFSL) report, ICICI Bank’s share fell to 38% in January 2021. In February 2021, ICICI Bank was trailed by SBI Card (18.1%) and Axis Bank (18%) in new issuances. In FY21, ICICI Bank gained the highest incremental market share of 32.4%, followed by SBI Card at 30.6%.

Recent Related News:

RBI in the exercise of powers vested in it under subsection (1) of Section 35 A of the Banking Regulation (BR) Act, 1949 read with Section 56 of the BR Act, 1949 has issued certain Directions to Independence Co-operative Bank Limited based in Nashik, Maharashtra due to its present liquidity position.

About American Express Banking Corp (Amex):

Establishment – 1921
Headquarters – Gurgaon, Haryana
CEO – Manoj Adlakha

About Diners Club International Ltd:

It was the first independent payment card company in the world.
Establishment – 1950
President & CEO – Eduardo Tobon