U.S. trade official criticised India's decision to ban Mastercard

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U.S. trade official criticised India's decision to ban Mastercard

NEW DELHI Reuters - A senior U.S. trade official privately criticised India's July decision to ban Mastercard Inc. from issuing new cards, calling it a draconian move that caused panic according to the U.S. government emails watched by Reuters.

The documents show frustration within the U.S. government after the Indian central bank banned http: www.reuters.gov.in /emergency/content/blog/cfk (Facebook) in April 2002. com article Indian-Banking - American Express - idUSL 4 N 2 MG 3 I 6 new card issuance by American Express and Diners Club International in April, then took similar action against Mastercard https: www.reuters.org The Reserve Bank of India accuses the companies of breaking data storage rules. In Washington and India, the ban on MasterCard - a top payment network in India along Visa - triggered a flurry of emails between U.S. officials as they discussed next steps with Mastercard including approaching the RBI, the government emails show.

We've started hearing from stakeholders about some pretty draconian measures that the RBI has taken over the past few days, Brendan A. Lynch, the deputy assistant U.S. trade representative for South and Central Asia, wrote on July 16 -- two days after the Mastercard announcement.

It sounds like others Amex, Diners may have been impacted by similar actions recently, wrote Lynch, asking his colleagues in India to get in touch with their Central Bank contacts to see what's going on Lynch, spokespeople at the Office of the U.S. Trade Representative and the U.S. Embassy in New Delhi did not respond to requests for comment. The US government has not commented publicly on the MasterCard ban.

The RBI did not immediately respond to an email.

A MasterCard spokesman told Reuters: «We've had very constructive engagements with the Indian and U.S. governments over the past few weeks and appreciate their support of both government.» This includes discussions with the RBI, and Mastercard has made good progress as it looks to resolve the situation quickly, he said.

MasterCard counts India as a Key Growth Market. In 2019 it said it was bullish in India - a country where it's made major investment bets and installed research and technology centres.

The MasterCard banned have rattled https: www.reuters.gov.uk. com world india Indias-ban - mastercard-hit - banks-card - operations-income - sources - 2021 - 07'15 the company and upset the Indian financial sector as new partner banks fear a hit to their income as they struggle to swiftly partner with new networks to offer cards.

The RBI acted against Mastercard because it was found to be non-compliant with the 2018 rules despite the lapse of significant time and adequate opportunities The regulations, requiring Indian card networks to store unfettered payments data locally for unfettered supervision access were implemented after failed lobbying efforts of U.S. firms soured trade ties between New Delhi and Washington.

Mastercard has admitted that it is disappointed with the decision. The company has told Reuters it had submitted additional audit report https: www.reuters.com com world india mastercard-submits - new-audit - india-after-data-handling at RBI before the ban took effect on 22 July.

The RBI explained to his colleagues in one that the understanding was that he had all the information they need and hope that they will respond appropriately. If RBI fails to change course, he wrote that the panic may resume as the ban approached.

He wrote days later that Mastercard continued to put on the full court press in Washington.