RBI bars American Express, Diners Club from adding new customers from May 1

The Reserve Bank of India (RBI) on Friday restricted American financial firms Diners Club International Limited and American Express Banking Corp from adding new customers to their card network from May 1 for violating data storage norms. 

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In a statement, the central bank said the sanction will not impact the firm’s existing customers, PTI reported. The two companies are Payment System Operators authorised to operate card networks in India under the Payment and Settlement Systems Act, 2007 (PSS Act). 

“These entities have been found non-compliant with the directions on Storage of Payment System Data,” the RBI said in a statement. 

The action has been taken by the RBI under the powers vested to it by the PSS Act. 

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In April 2018, all payment system providers were directed to store all data – including full end-to-end transaction details, information collected or carried or processed as part of the message, and payment instructions – in a system only in India. 

They were also required to submit a System Audit Report (SAR), conducted by a CERT-In empanneled auditor, to the RBI as well as report compliance to the bank.