The Reserve Bank of India has on Wednesday lifted the ban on new customer acquisition by American Express which was imposed with effect from May 2021 due to non-compliance with local data storage norms.
"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 onboarding of new domestic customers have been lifted with immediate effect," RBI said.
Similar bans were imposed on Diners Club International and Mastercard previously.
The ban on Diners Club was lifted in November last year, while the restrictions on Mastercard was removed in June this year.
Companies such as Mastercard, Visa, American Express and Diners’ Club have been required to store Indian payments 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,” said 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.
“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,” Khanna added.
When the ban was imposed, American Express had 1.51 million credits, which fell to 1.36 million as of June end this year.
The banking regulator, in April 2018, had told all payment system operators to store their entire data in a system only in India.
They were also required to report compliance to the RBI and submit a board-approved System Audit Report (SAR), prepared by a CERT-In-empaneled auditor within the timelines specified therein.
The data that was 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.
