Mastercard Inc (NYSE: MA) will not issue new cards in India; the decision has caused panic. The decision of the Government of India to ban the group from giving new cards in the country has left the U.S. government frustrated.
Companies are accused of breaching local data storage rules
India’s central bank has banned the American Express Company (NYSE: AXP) and the Diners Club International, Citigroup Inc (NYSE: C) from issuing new cards in April. Concurrently, the government issued a ban on Mastercard Inc in July. The Reserve Bank of India holds the companies of breaching local data-storage norms. However, it is learned that the prohibition which is implemented does not apply to existing cardholders.
With the announcement of the ban, a series of emails were exchanged between India and the U.S.
The announcement of the Indian government banning Mastercard Inc has resulted in an exchange of a series of emails between the Indian government and its U.S. counterpart. Through the emails, the next course of steps that need to be implemented was discussed. In addition, a couple of days after the ban announcement, Brendan A. Lynch, the deputy assistant U.S. trade representative for South and Central Asia, communicated that American Express Company and the Diners Club International, Citigroup Inc could be impacted by the decision. Lynch also asked his colleagues in India to establish contact with their known sources in the central bank to understand the unfolding developments. Meanwhile, the U.S. government did not comment on this issue in the public domain. Simultaneously, the RBI also did not respond.
Mastercard Inc is having productive engagements with the Indian and U.S. governments
A spokesperson from Mastercard Inc stated that the group had had productive engagements with the Indian and U.S. governments for the last few weeks. The spokesperson added that the negotiation that the company is having with the RBI had made tremendous progress. RBI has shown interest in solving the issue, the spokesperson added.
India is a productive market for Mastercard Inc.
Mastercard Inc sees excellent potential in the Indian market. In 2019, the group expressed that it was bullish in India. As a result, the company has invested in research and development centers in India.