Are US corporate giants arrogant? Now Mastercard refuses to follow RBI rules

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The RBI has banned Mastercard Inc from issuing new debit or credit cards to Indian customers as the US financial services giant is refusing to follow the country’s data storage rules. </p>
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The RBI notification states that Mastercard has not complied with data storage rules since 2018 requiring foreign card networks to store Indian payments data only in India so that the regulator can have unfettered supervisory access. The ban comes into effect on July 22.</p>
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"Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions," the RBI has stated.</p>
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<strong>Also read: </strong> <a href="https://www.indianarrative.com/economy-news/rbi-sees-danger-in-amazon-google-facebook-entering-financial-services-sector-99694.html">RBI sees danger in Amazon, Google, Facebook entering financial services sector</a></p>
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Mastercard is a big player in the Indian market as it has also entered into partnerships with many Indian banks that offer cards using the U.S. company’s payments network.</p>
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The RBI said the decision will not impact existing customers of Mastercard, and the company should advise all card issuing banks in India to comply with the order.</p>
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The ban on Mastercard comes less than three months after RBI barred American Express and Diners Club International, owned by Discover Financial Services, from issuing new cards as they had also violated these rules. However, these companies operate on a much smaller scale than Mastercard.</p>
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<strong>Are US companies arrogant?</strong></p>
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American companies have been undertaking hectic lobbying to wriggle out of the RBI directive for local storage of data after it was notified in 2018 and the issue has figured prominently in India-US talks at the government level. The U.S. companies claim that setting up local servers would increase their infrastructure costs and adversely impact their global fraud detection platforms.</p>
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However, India has cracked down on money laundering which also has the issue of terror finance linked to it and having local storage of data enables regulators to track suspicious transactions more easily. </p>
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Mastercard said it was "disappointed" with the RBI's decision and that it had provided regular updates on its compliance with the rules since 2018.</p>
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"We will continue to work with them to provide any additional details required to resolve their concerns," it said in a statement late Wednesday.</p>
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The run-in with Mastercard also comes at a time when US social media giants such as Twitter, Facebook and its subsidiary WhatsApp, and Google have been locking horns with the government over following rules such as setting up local servers and appointing India-based compliance officers.</p>
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Similarly, e-commerce giants such as Amazon have also been accused of not complying with Indian rules and are being investigated by the Competition Commission of India.</p>
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The US corporate giants are even being seen as arrogant in their approach. Commerce Minister Piyush Goyal had said : "I have had several engagements with these large companies, particularly the American ones, I can see a little bit of arrogance of their being big and their ability to finance large amounts of money in the initial stages to try and capture the Indian market or larger part of the Indian market particularly certain products to the detriment of our mom and pop stores."</p>
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He also said, “the Indian market is big and all players are welcome to participate but unfortunately large e-commerce companies blatantly flout the laws of the land.”</p>