RBI lifts an 11-month ban on the issue of new cards by MasterCard and surges the limit of e-mandates for transactions up to INR 15,000

The RBI has lifted the 11-month ban on the issue of new cards by MasterCard. It was initially proposed due to the compromised regulatory compliances on data storage guidelines.

The RBi has also surged the Additional Factor of Authentication (AFA) limit from INR 5000 to INR 15000 per transaction for e-mandates on cards, Prepaid Payment Instruments (PPIs), and UPI for recurring transactions.

The RBI stated, “In view of the satisfactory compliance demonstrated by MasterCard Asia/ Pacific Pte. Ltd., with the RBI circular dated April 6, 2018 on storage of payment system data, the restrictions imposed, vide order dated July 14, 2021, on onboarding of new domestic customers have been lifted with immediate effect.”

MasterCard was barred from onboarding new debit, credit, or prepaid card domestic customers by the Reserve Bank of India (RBI).

The RBI said that it had given sufficient time and opportunities to India’s largest operating card schemes to comply with the regulatory norms in payment system data. But, it was of no luck as MasterCard was non-compliant with the RBI.

Under Section 17 of the payment and settlement Systems Act, 2007, the order cannot impact the MasterCard customers onboarded before the ban.

The RBI issued a circular in April 2018 regarding the storage of payment system data. It said that all system providers must ensure that the complete data related to payment systems operations must be stored in a system only in India.

The data must include end-to-end transaction details, information obtained through messages, and payment instructions. For any foreign leg of the transaction, mirroring of the data in the foreign country was permitted.

Regarding the surge in transaction limit, RBI stated in a circular, “On a review of the implementation of the e-mandate framework and the protection available to the customers, it has been decided to increase the AFA limit from INR 5000 to INR 15000 per transaction.”

Over the past decade, there have been several restrictions imposed by RBI for Card payments due to safety and security measures. It included the requirement of AFA, especially for ‘card-not-present’ transactions.

According to the e-mandate, an individual has the right to repeatedly give standing instructions to the bank to debit a specific amount.