Tag: compliance

In a bid to get the ban on issuing new cards revoked, payments major Mastercard is planning to submit an additional audit report by an independent agency to the Reserve Bank of India to show its compliance with the data localisation norms

According to sources close to the development, Mastercard has already submitted to the RBI its annual System Audit Report showing compliance with the data norms, but there were delays in sending a supplemental audit report due to which the central bank barred the company from issuing cards.

The company hopes the additional report will address the RBI’s concerns and enable Mastercard to go back to business as usual, said a source.

Reports rejected

According to banking industry sources, the initial system audit report was found to be deficient by the RBI. “The compliance by Mastercard was not satisfactory. The company had been dragging its feet on meeting the regulatory norms,” said a source aware of the regulatory processes.

Mastercard is understood to have taken time in submitting a third-party audit report on compliance with data localisation norms and had not appointed a domestic auditor certified by CERT-in. A part of the payments data on the Indian leg of the transaction being processed abroad was not deleted within the mandated 24 hours.

‘Slight delay’

To an email query from BusinessLine, Mastercard said: “When RBI required us to provide additional clarifications about our data localisation framework in April 2021, we engaged our government- empanelled, audit firm to address those points. That report was slightly delayed and submitted to the RBI on July 20, 2021.”

“We are hopeful that this latest filing provides the assurances and insights required to address their concerns and move toward a resolution on the matter,” it said, adding that it is focussed on ensuring that its current business continues to operate as usual.

“Since the RBI’s 2018 directive on data localisation and storage was issued, we have worked closely with the RBI and the Indian government to ensure we are compliant with both the letter and the spirit of the order,” Mastercard said.

Mastercard has been betting big on the Indian market with plans to invest $1 billion over a five year period to build digital payment infrastructure and work on innovations in the digital payments space.

It has also been one of the largest players in terms of issuances for cards and plans of many banks have been impacted by the ban.