RBI Restricted American Express and Diners Club From Issuing New Credit Cards. This decision will be effective from 1st May 2021. This restriction has been imposed for violation of rules to preserve the data and other information of Indian customers in India.
Type of Credit Cards issued by American Express and Diners Club
American Express Banking Corporation and Diners Club International Limited are payment service system Operators. Both companies are licensed to operate the card payment service under the Payment and Settlement Systems Act, 2007 (PSS Act) in the country.
American Express Banking Corporation issues various types of credit cards to users on the basis of their income and Credit Score(CIBIL Score). Types of Credit Cards Issue by American Express Banking Corporation are The American Platinum Card, Express Membership Reward Credit Card, Platinum Reserve SM Credit Card, Platinum Travel Credit Card, Smart Earn Credit Card, etc.
Diner Club International issues their Credit Card in India Through HDFC bank. These cards are Black and Privilege.
Why RBI Restricted Both Companies from issuing Credit Cards?
RBI Restricted Both Companies from issuing credit cards because Both the companies were not following the instructions regarding data and information storage related to the payment system.
RBI Regulations Regarding Service Providers associated with Payment System
All the Service Providers associated with the Payment System must ensure that the data and information related to the payment services run by them are to be kept within the prescribed system in India within 6 months. Companies were also required to inform the RBI about compliance with this directive. Also, the CERT-In was to submit the ‘System Audit Report’ made by the auditors on the panel of the Indian Computer Emergency Response Team with the approval of the Board of Directors
Will Existing Customers get affected by this decision of RBI?
No, Existing Customers will not be affected by this decision of RBI. RBI told that Existing Customers will be using their cards, as usual, they are using. It means if you have a Credit card of American Express and Diners then it will be working as usual.
American Express said that it has been in constant dialogue with the RBI to keep the data and information at the local level. The company claims that progress was given regarding compliance of the rules.
The company said that we are saddened by the RBI’s move. We are working to overcome their objections soon. The company assured that there will be no impact on our existing customers in India and our customers can use and accept our cards as before.
SBI Cards will get more customers
After this Restriction on American Express and diners Club, SBI Cards has got another chance to increase their Customer Base. Previously RBI Restricted HDFC bank from issuing New Credit cards and now These two credit card companies get restricted from issuing new credit cards.