Fresh card issuance by 5 private banks to be impacted due to ban on Mastercard by RBI: Report

Yes Bank, RBI, mastercard, axis bank, hdfc bank, IndusInd Bank

As many as five private sector banks, including Axis Bank,

Yes Bank

, and

IndusInd Bank

, are to be impacted by the Reserve Bank of India’s decision to ban Mastercard from issuing new cards for not complying with local data storage guidelines, according to a report.

HDFC Bank would also have been affected by this decision but the lender is already facing restrictions by the RBI on issuance of new cards (debit, credit or prepaid).

Besides these five banks, Bajaj Finserve and SBI Card may face problems as they were also issuing cards of this payment gateway.

So, in all, as per the report of global bokerage firm Nomura, seven financial institutions would not be able to issue new card as they sourced significant number from Marstercard.

The issuance of new cards through another payment gateway would take 2-3 months because it involves technology integration and other modalities.

“Among credit card issuers including co-brand partners, RBL Bank, Yes Bank and Bajaj Finserv lending are most impacted, in our view, as their entire card schemes are allied with Mastercard,” the report said.

As per the report, RBL Bank, Yes Bank and Bajaj Finserv were fully dependent on Mastercard for card issuance while dependence of IndusInd Bank, ICICI Bank and Axis Bank varied from 35 per cent to 40 per cent.

Card-issuing arm of State Bank of India, SBI Card, has only 10 per cent of their card tied up to the banned Mastercard. On the other hand, Kotak Mahindra Bank’s card portfolio is entirely allied to Visa and hence won’t face any issues.

Amid the development, RBL Bank on Thursday said it has entered into an agreement with Visa Worldwide to start issuance of credit cards on the Visa platform. The bank will be able to issue the new cards after technology integration which is expected to take 8-10 weeks.

The RBI barred Mastercard Asia/Pacific Pte Ltd from on-boarding new customers across all its card products (debit, credit and prepaid) from July 22, 2021, as it failed to comply with data storage norms.

Taking action against Mastercard, the RBI said, “Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data.”

However, the RBI’s directions will not impact existing customers of Mastercard.

Mastercards became the third major Payment System Operator on which restrictions have been imposed for non-compliance with RBI’s direction on Storage of Payment System Data.

Earlier, the RBI had restricted American Express Banking Corp and Diners Club International Ltd from onboarding new domestic customers on to their card networks from May 1 for violating data storage norms.

Managements of both Axis and ICICI Bank have in the recent past talked about their co-branded cards with Flipkart and Amazon, respectively, to be the fastest-growing card schemes, the report said.

“These card schemes are 14 per cent and 15 per cent of outstanding cards for Axis and ICICI, respectively. While Amazon ICICI card is allied to Visa, The Flipkart Axis card is allied to Mastercard, and hence is a potential medium-term risk, should the current status-quo continue,” it said.

Mastercard is a payment system operator authorised to operate a card network in the country under the Payment and Settlement Systems Act, 2007 (PSS Act).

In terms of the RBI’s circular on Storage of Payment System Data on April 6, 2018, all system providers were directed to ensure that within a period of six months the entire data relating to payment systems is stored only in India.

They were also required to report compliance to the RBI and submit a board-approved system audit report conducted by a CERT-In-empanelled auditor within specified timelines.

News Related

OTHER NEWS

PNB awaits SAT order on Carlyle deal

Punjab National Bank (PNB) has said it will wait for the Securities Appellate Tribunal (SAT) order before taking any decision on the PNB Housing Finance-Carlyle deal. “We await judgement by ... Read more »

PM Modi to launch digital payment solution e-RUPI today

Prime Minister Narendra Modi will launch e-RUPI, a person and purpose specific digital payment solution, on Monday via video conferencing, his office said. Underlining that Modi has always championed digital ... Read more »

Bhavin Turakhia's Titan raises $30 million from Automattic

Titan, the professional email startup founded by serial entrepreneur Bhavin Turakhia has raised $30 million from Automattic, the parent company of WordPress.com, valuing it at $300 million, a senior company ... Read more »

Healthtech startup Onsurity gets $16 million from Quona Capital, others

Mumbai: Onsurity, an employee health benefits platform, has raised $16 million in a Series A funding round led by Quona Capital and existing investors Nexus Venture Partners and Whiteboard Capital. ... Read more »

PM Modi to launch e-RUPI today. Here's all about the cashless digital payment solution

Prime Minister Narendra Modi will launch e-RUPI, a person and purpose specific digital payment solution on Monday via video conferencing. The event will take place at 4.30 pm. e-RUPI is ... Read more »

Banks close lakhs of current accounts, clients open grievance accounts

Indian banks have closed hundreds of thousands of current accounts, inconveniencing many small business owners, as the time to comply with a Reserve Bank of India directive has ended. Banks ... Read more »

As India Inc opens up, industry seeks clarity on availability of ITC under CSR spending

With India Inc opening up purse strings during the pandemic to provide medical equipment and aid, non-availability of input tax credit on goods purchased as part of corporate social responsibility ... Read more »

Madras HC strikes down provisions to ban online gaming; companies cheer

Chennai/Mumbai: The Madras High Court on Tuesday struck down the entirety of Part II of the Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021, which banned betting or wagering ... Read more »

StackBox gets $1.2-million funding from Ecosystem Ventures, others

New Delhi: StackBox, a logistics technology startup, has raised $1.2 million (about Rs 8.9 crore) in a funding round led by Ecosystem Ventures alongwith participation of LetsVenture and existing investors. ... Read more »

Sterlite Technologies teams up with Facebook Connectivity for 4G, 5G radio products

New Delhi: Sterlite Technologies Ltd. has collaborated with Facebook Connectivity to design and develop 4G and 5G radio products, as part of the Evenstar program to help accelerate commercial deployment ... Read more »

Alibaba misses revenue estimates as e-commerce growth slows

China’s Alibaba Group Holding Ltd missed analyst estimates for first-quarter revenue on Tuesday, as its e-commerce business was hurt by rising competition from smaller players such as JD.Com Inc and ... Read more »

Agritech startup Krishify gets $2.7 million from Omidyar, others

New Delhi: Krishify, an agriculture technology startup, has raised $2.7 million in a pre-Series A funding round led by Omidyar Network India, Ankur Capital and Orios Ventures. Nitin Kaushal and ... Read more »

RBI's new rules on interchange fee, 24/7 bulk clearing facility functional

The Reserve Bank of India’s new directions on raising interchange fee and making available the facility of bulk clearing round the clock have become effective from Sunday onwards. The RBI ... Read more »

Non-bank lenders to see high levels of stress, recovery only in FY23: ICRA

Non-bank lenders would continue to see elevated levels of asset quality stress on their books, with the situation improving only in the next fiscal year, rating agency ICRA said on ... Read more »

PSU banks mobilise record funds of Rs 58,700 crore from markets in FY'21

Notwithstanding economic disruptions caused by the pandemic, public sector banks (PSBs) have managed to raise a record Rs 58,700 crore from markets in FY2020-21 through a mix of debt and ... Read more »

Ola Electric scooter coming this August 15. Here's what we know so far

Ola Electric will launch its much anticipated scooter this August 15, Bhavish Aggarwal, the CEO of the company, said today. Ola Electric started taking bookings for its electric scooter in ... Read more »

The $29 billion deal in 11 weeks: how Square bought Afterpay

Jack Dorsey introduced the world to expressing itself in just 140 characters as the creator of Twitter Inc, and his payments company, Square Inc, also likes getting straight to the ... Read more »

'We listed in India so our customers could own a part of us'

Food-delivery and restaurant-discovery platform Zomato , the first high-profile consumer internet unicorn to list on Indian bourses last month, will continue to chase growth and build a long-term business, undeterred ... Read more »

No error of judgement in PNB Housing Finance deal; future course as per SAT order: PNB MD

Asserting that there was no error of judgement with regard to the fund infusion decision of PNB Housing Finance, Punjab National Bank (PNB) managing director S S Mallikarjuna Rao on ... Read more »

IndusInd Bank gets empanelled as Agency Bank to RBI

IndusInd Bank on Tuesday said it has been empanelled by the Reserve Bank of India (RBI) to act as an “Agency Bank” to facilitate transactions related to government businesses. It ... Read more »

Infra.Market gets funding at $2.5-billion valuation, eyes acquisitions

Bengaluru: Infra.Market, a business-to-business (B2B) commerce platform for construction materials, has raised $125 million from existing investor Tiger Global at a post-money valuation of $2.5 billion, founder Souvik Sengupta told ... Read more »

MG Motor ties up with Jio for connected features in its upcoming mid-size SUV

MG Motor India on Tuesday said it has tied up with digital services provider Jio India for the Internet of Things (IOT) features in its upcoming mid-size SUV. The automaker, ... Read more »

upGrad acquires edtech startup KnowledgeHut to tap the skilling market

New Delhi: upGrad, an edtech startup focused on higher education, has acquired KnowledgeHut to enter the short-duration upskilling and reskilling segment that has a market potential of more than $58 ... Read more »

Manu Kumar's HiHello raises $7.5 million from Foundry Group, others

New Delhi: HiHello, a digital business card and contact manager app, has raised $7.5 million in a Series A funding round led by Foundry Group along with participation of Lux ... Read more »

IDFC First Bank logs Rs 630-crore loss in Q1 on pandemic provisions

Private lender IDFC First Bank on Saturday posted a net loss of Rs 630 crore at the end of the June quarter, with provisions more than doubling from the year-ago ... Read more »

Honda Motorcycle & Scooter India July sales rise 20 pc to 3,85,533 units

Honda Motorcycle & Scooter India (HMSI) on Tuesday reported a 20 per cent rise in total sales at 3,85,533 units in July. The company had sold 3,21,583 units in the ... Read more »

UST chalks out hiring plan to keep up with demand for digitalisation

Pune: UST, a provider of digital technology and transformation solutions, plans to hire more than 10,000 people globally this year as it looks to keep up with the accelerated demand ... Read more »

Skill-Lync raises $17.5 million from Iron Pillar, others

Mumbai: Y Combinator-backed Skill-Lync, an engineering-focused edtech startup, has raised $17.5 million in a Series A funding round led by Iron Pillar. While the India-focused venture capital invested $15 million, ... Read more »

IDFC First Bank logs Rs 630 crore loss in Q1 on Covid provisioning

Private lender IDFC First Bank on Saturday reported a net loss of Rs 630 crore in the April-June quarter due to provisioning measures for cushioning the impact of the second ... Read more »

CarTrade Tech IPO to open on August 9; price band fixed at Rs 1,585-1,618

New Delhi: The initial public offering (IPO) of CarTrade Tech will open for subscription on August 9. The price band for the same has been fixed at Rs 1,585-1,618 per ... Read more »

Nykaa files papers with Sebi for IPO

Mumbai: Lifestyle retailer Nykaa has filed its draft red herring prospectus with the Securities and Exchange Board (Sebi) on Monday for a initial public offering, said bankers. The issue will ... Read more »

Govt seeks info to up PLI sops for IT hardware

The government has sought estimates of production, exports and the nature of value addition that will take place if the production-linked incentive (PLI) scheme for IT hardware were to be ... Read more »

Payment gateways under probe for 'money transfers' to Chinese apps

A bunch of Indian payment gateway companies are being investigated by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act for allowing Indian customers to transfer money to ... Read more »

Focus on growth, building long-term business: Zomato's cofounder Deepinder Goyal

Bengaluru | Mumbai: Zomato , the first Indian unicorn to list on the bourses last month, will continue to chase growth and build a long-term business, cofounder Deepinder Goyal told ... Read more »

JPMorgan faces regulatory requests over message preservation

JPMorgan Chase & Co is engaged in “certain resolution discussions”, but there’s no guarantee that the talks will result in a resolution. (BLOOMBERG) – JPMorgan Chase & Co, which rattled ... Read more »

PM switches on e-RUPI digital payments mode

Voucher-based e-RUPI, the latest addition to India’s growing catalogue of digital-payment solutions, will help create a transparent and efficient welfare delivery mechanism, prime minister Narendra Modi said in his address ... Read more »

Piaggio India expects share of electric in its three-wheeler sales to treble in next 2-3 years

Piaggio Vehicles expects the share of electric in its three-wheeler sales in India to treble in the next two-three years as rising fuel prices and government incentives to encourage the ... Read more »

Nektar.ai raises $6 million as part of second tranche of its seed round

Nektar.ai, a business to business (B2B) sales productivity startup, has raised $6 million as part of the second tranche of its seed round, from investors led by B Capital Group, ... Read more »

Fino Payments Bank files for Rs 1300 crore IPO

Four years after starting operations Fino Payments Bank will soon launch a Rs 1300 crore initial public offering which includes a Rs 300 crore OFS component. The Blackstone, ICICI Group ... Read more »

EU investigates Facebook's proposed purchase of Kustomer

European Union regulators are opening an in-depth investigation of Facebook‘s plan to buy Kustomer over concerns that the deal would stifle competition for customer relationship management software. The EU Commission ... Read more »