RBI Lifts Business Restrictions Imposed on American Express Banking Corp

The Reserve Bank of India (RBI) on Wednesday lifted its 16-month-old ban on global credit card major American Express (AmEx) from taking on new customers after the company complied with the central bank’s data localization & storage policy. This policy, which became effective in April 2018, mandates that all banks and payment system providers doing business in India solely store their customers’ data there.

“In view of the satisfactory compliance demonstrated by American Express Banking Corp. with the Reserve Bank of India (RBI) circular dated April 6, 2018, on Storage of Payment System Data, the restrictions imposed, vide order dated April 23, 2021, on the onboarding of new domestic customers have been lifted with immediate effect,” RBI said. Companies such as Mastercard, Visa, American Express, and Diners’ Club have been required to store Indian payment data locally since October 2018. This was done to provide the reserve bank “unfettered supervisory access”.

“We welcome today’s decision by the Reserve Bank of India, which enables American Express Network to onboard new customers effective immediately.” Sanjay Khanna – Interim Country Manager & COO, American Express Banking Corp.

“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,” Khanna said.

Although the central bank had requested that all banks and providers of payment systems abide by its data localization and storage policy as of April 2018, certain organizations were hesitant to follow the instructions. The RBI first gave these businesses six months to follow its instructions. After that, despite having received multiple extensions, some businesses still didn’t comply.

“Despite the passage of some time and ample opportunities being given, (Mastercard) has been determined to be non-compliant with the directives on Storage of Payment System Data,” the RBI stated in its order against Mastercard, dated July 14, 2021. Mastercard approached the central bank with a compliance audit report a few weeks after the RBI’s directive.