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Bloomberg
The Reserve Bank of India (RBI) restricted American Express Banking Corp (Amex) and Diners Club International Ltd (Diners) from adding new local customers, citing non-compliance with data-storage rules. The order will take effect from May 1 and won’t impact existing customers, the RBI said in a statement.
The firms are the first to be penalized under India’s data-storage rules announced 2018, which ordered payment systems providers to store all data generated by them on servers in India. Digital banking is a key focus for Governor Shaktikanta Das, who in recent months has also curbed India’s biggest private sector bank — HDFC Bank Ltd — from adding new digital products and credit card customers after the lender reported multiple outages.
The announcement comes as Amex is on the hunt for new customers, encouraged by lower-than-expected losses on its loans. It has the highest number of credit card customers among foreign banks in India after Citigroup Inc., which is looking to exit the Asian market.