New Delhi. Reserve Bank of India (RBI) has banned American Express Banking Corporation and Diners Club International Limited. In a ban imposed till May 1, the RBI on April 23 banned the two institutions to create new credit card customers in India. Both banks have been accused of disobeying India’s law regarding payment system data storage. However, this decision of RBI will not have any effect on their existing customers.
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Both banks do credit card business
Significantly, Diners Club International Limited and American Express Banking Corporation undertake banking system operations in India. Both banks do credit card business. To which the Payment and Settlement Systems Actor 2007 rule applies. Banks have the right to supervise this law with the RBI. In this case, the central bank has exercised its right of supervision.
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Data storage case
Let us tell you that in one of its circulars, the Reserve Bank of India on April 6, 2018, directed all payment system providers to keep every data related to customers and transactions within India within the next 6 months. Under the RBI order, all the information received through transaction details, payment instructions and messages were to be stored in India. But both banks failed to follow these rules.