Why RBI has banned MasterCard in India for new customers

If the debit or credit card of MasterCard is kept in the pocket, then know what will be the effect on you due to the ban. MasterCard Debit and Credit Card: MasterCard and Visa cards dominate the credit card market, but the ban on MasterCard will increase the importance of Visa and Rupay cards.

Highlights

  • RBI has banned MasterCard for not complying with the rules for storing data in the country.
  • Seven financial institutions or banks would not be able to issue new cards, as they used to take cards from Mastercard in large numbers.
  • The RBI has already put restrictions on HDFC Bank to issue new cards.

The decision taken by the Reserve Bank of India not to issue the new MasterCard created a big stir in the credit card market. However, this decision will not affect the old cardholders much. With Visa and MasterCard being the dominant force in the credit card business, the importance of Visa will increase further after MasterCard is banned. Let us know what is the share of Visa, Mastercard, and Rupay in the credit card market in the country …

Share of companies in the credit card market

  • Visa – 45%
  • MasterCard – 33%
  • RuPay – 20%.
  • Amex – 3%

How many people have debit and credit cards?

Many banks in the country issue MasterCard, Visa, and RuPay cards. However, after the ban on the new MasterCard, the importance of Visa and Rupay cards will increase more among customers and banks. So far, credit cards have been issued to 6.25 crore people in the country, that is, so many cards are in circulation. On the other hand, if we talk about debit cards, then 90 crore debit cards are in circulation. 

Why did RBI put a ban on Mastercard?

RBI has taken this action on Mastercard due to non-compliance with data storage rules. Mastercard was not storing the data of its customers in India, due to which this decision was taken. For this, the company was given ample time and opportunity. Although many companies opposed it in the year 2018 but later agreed to follow the rules. 

Will it affect customers?

This decision of RBI will not have any significant impact on existing customers. However, new Mastercards will not be issued from July 22. In such a situation, banks may get delayed in issuing new credit cards. On the other hand, the banks which had agreements only with Mastercard will have to enter into new agreements and banks will not be able to issue new credit cards till the new agreement is in place. 

What has Mastercard clarified?

On this decision of RBI, Mastercard clarified that they are disappointed with this decision of the central bank. The company said that it is fully committed to its legal and regulatory obligations. The company said that it is ready to take forward the Digital India vision of the government. Also committed to working with clients and partners.

RBL’s troubles increased

At present, RBL issues credit cards only on the MasterCard network. However, the bank has entered into an immediate agreement to issue credit cards on the Visa payment network. This new agreement is expected to take 8-10 weeks. Explain that RBL issues one lakh new credit cards every month, which will now be delayed.