India’s central bank has banned Mastercard from issuing new credit, debit and prepaid cards within its country, citing a failure by the Purchase-headquartered company to comply with a 2018 rule requiring foreign card issuers to store Indian payments locally.
Mastercard accounts for 33% of all card payments in India, according to data from the London-based payments start-up PPRO that was cited by the AFP news agency. The ban, which goes into effect on July 22, will not impact Mastercard’s current card users within India.
However, Reuters reports that banks in India will need to sign new commercial deals with rival networks such as Visa, a process that could take up to five months to complete. Mastercard is the second U.S.-headquartered company banned by the Reserve Bank of India for alleged non-compliance of its 2018 rule – American Express was subject to a similar prohibition in April.
Mastercard has put a major focus on the Indian market, growing its local workforce from 29 in 2013 to 4,000 today, making it the second largest national workforce after its U.S. operations. The company also made a pair of $1 billion investments in the country, one covering the years 2014 to 2019 and the second covering 2019 through 2022.
In a statement to CNN, Mastercard said “there is no impact to our current operations in India,” adding it “is fully committed to our legal and regulatory obligations in the markets we operate in” and will work with the central bank to “provide any additional details needed to resolve their concerns.”