RBI had restricted American Express Banking Corp. from on-boarding new domestic customers onto its card network in India, as the company was not in compliance with certain regulation related to storage of domestic payments data
RBI lifts ban on American Express. (Credit: CardMapr.nl on Unsplash)
The Reserve Bank of India (RBI) has lifted business restrictions on US-based credit card service provider American Express’ Indian unit, almost after 16 months.
In April last year, RBI had restricted American Express Banking Corp. from on-boarding new domestic customers onto its card network in India.
According to the Indian regulator, the company was not in compliance with certain regulation that requires foreign card networks to store domestic payments data only in India.
RBI said that the ban has been lifted considering the satisfactory compliance showed by the American Express Banking Corp.
With the ban lifted, American Express is now allowed for new customer acquisition.
At the time of restrictions implemented, American Express had 1.51 million credit card customers, which declined to 1.36 million as of 30 June 2022, reported Business Standard.
American Express Banking Corp interim country manager and COO Sanjay Khanna said: “We welcome today’s decision by the Reserve Bank of India, which enables American Express Network to onboard new customers effective immediately.
“India is a key strategic market for American Express and today’s decision is the result of our significant local investments in technology, infrastructure, and resources.
“American Express’ ability to deliver best in class value and customer experiences will enable us to meet the increasing demand for premium products and services and grow our business in India.”
According to its order dated 23 April 2018, RBI required foreign companies to store the payments data locally in India.
In addition, the companies were also required to report compliance to the RBI and submit a board-approved System Audit Report (SAR), prepared by an auditor within the specified timelines.
The data required to be stored in India included full end-to-end transaction details, information collected, carried, and processed as part of the message, and payment instruction.
Along with American Express, RBI has also imposed restrictions on companies including Mastercard, Visa, and Diners’ Club, due to similar compliance issues.
In June, the Indian regulator had lifted restrictions on Mastercard, following satisfactory compliance on rules regarding storage of payment system data.