The Restriction
Indian Regulatory body, RBI  lifted its 15 months restrictions on American Express citing adherence on part of the company. The regulatory body gave a go-ahead to  American Express to continue its business in India starting August 24. The company was stopped from adding new customers from India starting May In the previous year, for not adhering to data rules in April In the previous year. As per reports the company failed to adhere to the RBI instructions, involving setting up a data bank in India in the given time.
The Indian regulatory body, RBI routinely asks companies to stop business following non-adherence with its orders. In the previous year in July, Mastercard was Stoppedfrom adding new customers on similar lines. However, the restriction was revoked by Central Bank only this year citing improved adherence on part of Mastercard.
RBI 2018 guidelines
In 2018, RBI made it mandatory for all card providers s to store data involving numerous transactions to be established in India. The circular issued by RBI had given six months for the banks to comply. The circular also mandated that the processing data, if stored outside should be deleted within 24 hours. The regulatory body guidelines on data localization were preceded by the Supreme Court verdict on privacy in 2017, followed by the Srikrishna Committee report and the Ministry of Electronics and Information Technology, Data Protection Bill 2018.
Under the data localization scheme of things, a country’s data is utilized within the country. Localization of data negates any fear of misuse of data by foreign entities. Moreover, the localization of data provides control to its user.
Carding Sector in India
According to the RBI Â data released In the previous year, American Express had a 3% share in the credit card market in numbers. The same report also brought out that, a total of 10% of expenditure were done using American Express cards in the year. Due to the ban, the American Express card share dropped in 2021 to 2.5%. The carding sector is dominated by HDFC Bank. The HDFC bank with a 25% share leads the segment.
According to the RBI, the card providers were required to report adherence to RBI and submit SAR (System Approved Report) report conducted by CERT within the timeline.
