India central bank lifts curbs on AmEx after compliance on data rules

THE Reserve Bank of India (RBI) on Wednesday (Aug 24) lifted curbs imposed on American Express (AmEx) last year that had prevented it from taking on new customers in India, saying the US credit card giant had shown “satisfactory compliance” on data storage rules.

The RBI imposed the restrictions in April 2021 saying the company had not met data storage rules requiring foreign card networks to store domestic payments data only in India so the regulator can have “unfettered supervisory access”.

“In view of the satisfactory compliance demonstrated by American Express Banking with the Reserve Bank of India circular on Storage of Payment System Data, the restrictions imposed on onboarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement on Wednesday.

The RBI’s 2018 directive on data storage had sparked an unsuccessful lobbying effort from the US firms saying the rules would increase infrastructure costs, hit their global fraud detection platforms and affect planned investments in India.

The move comes months after the RBI had lifted restrictions on Mastercard over issuing debit and credit cards to new domestic customers due to similar compliance issues on data storage.

The regulator had also removed curbs on Diners Club International, owned by Discover Financial Services, last November.

AmEx’s credit cards in India stood at nearly 1.4 million at the end of June, or just 1.7 per cent of the total cards in circulation in the country, RBI data showed. Top Indian private lender HDFC Bank leads the market with 17.6 million cards.

AmEx did not immediately respond to a Reuters request for comment. REUTERS