RBL Bank, visa, state bank of india, payment system data, NPCI, nomura
New Delhi: The Reserve Bank of India (RBI) has asked lenders to roll out Business Continuity Plans (BCPs) after banning Mastercard from issuing new credit, debit and prepaid cards, the operator of the system. payment based in the United States that did not comply with the localization data standards.
In addition, the banking regulator is interested in knowing the details of its willingness to regularize the issuance of credit and debit cards on alternative payment platforms, such as Visa and RuPay, said three people familiar with the matter. AND.
On July 22, apex bank mentioned in a statement that the order would not affect existing Mastercard customers. Additionally, the central bank has been in contact with various lenders about the problems faced by the wider banking system after banning Mastercard.
“The regulator has actively sued the banks for activating the BCPs after having banned Mastercard. We were also asked to update the RBI on the impact of this decision on the banking system and the steps banks are taking to address a possible system-wide impact. There is a plastic shortage and the onboarding process will take time, ”the financial daily said, citing a senior executive at a lender.
Apart from credit cards, even the opening of new savings accounts could be affected as the procedure will have to be moved to Visa or RuPay. Experts estimate that the State Bank of India (SBI), HDFC Bank, ICICI Bank and Axis Bank will be primarily affected, as they typically open hundreds of thousands of accounts every month. India’s leading private sector lender HDFC Bank, for example, added 16.4 lakh of checking and savings accounts in the June quarter alone.
Banks are hoping the restrictions on Mastercard will be lifted soon, but part of the industry estimates it could take nearly three months to return to normal. “As we migrate to Visa and Ru-Pay, the system will be affected for at least 10 to 12 weeks before it normalizes,” said a senior executive at another lender.
It should be mentioned that RBL Bank and were the most affected by the central bank’s decision to ban Mastercard from acquiring new customers. Earlier, RBL Bank said in an ESB filing that nearly a lakh of new credit card issuance could be affected due to RBI’s ban on Mastercard.