Mumbai: The Reserve Bank of India restricted American Express Banking Corp. and Diners Club International Ltd. from adding new local customers, citing non-compliance with data-storage rules.
The order will take effect May 1 and won’t impact existing customers, the RBI said in a statement Friday.
The firms are the first to be penalized under India’s data-storage rules announced 2018, which ordered payment systems providers to store all data generated by them on servers in India. Digital banking is a key focus for Governor Shaktikanta Das, who in recent months has also curbed India’s biggest private sector bank — HDFC Bank Ltd. — from adding new digital products and credit card customers after the lender reported multiple outages.
The announcement comes as Amex is on the hunt for new customers, encouraged by lower-than-expected losses on its loans. It has the highest number of credit card customers among foreign banks in India after Citigroup Inc., which is looking to exit the Asian market.-Bloomberg
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