Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

U.S. trade official called India's Mastercard ban 'draconian'-emails

09/19/2021 | 07:30pm EDT
FILE PHOTO: Smartphone with Mastercard logo is seen in front of displayed stock graph in this illustration

NEW DELHI (Reuters) -A senior U.S. trade official privately criticised India's July decision to ban Mastercard Inc from issuing new cards, calling it a "draconian" move that caused "panic", according to U.S. government emails seen by Reuters.

The documents show frustration within the U.S. government after India's central bank banned https://www.reuters.com/article/india-banking-american-express-idUSL4N2MG3I6 new card issuance by American Express and Diners Club International in April, then took similar action against Mastercard https://www.reuters.com/world/india/indias-reserve-bank-bans-mastercard-issuing-new-cards-india-2021-07-14 in July.

The Reserve Bank of India accuses the companies of breaking local data-storage rules. The bans do not affect existing customers.

The ban on Mastercard - a top payment network in India alongside Visa - triggered a flurry of emails between U.S. officials in Washington and India as they discussed next steps with Mastercard, including approaching the RBI, the government emails show.

"We've started hearing from stakeholders about some pretty draconian measures that the RBI has taken over the past couple days," Brendan A. Lynch, the deputy assistant U.S. trade representative for South and Central Asia, wrote on July 16, two days after the Mastercard announcement.

"It sounds like some others (Amex, Diners) may have been impacted by similar actions recently," wrote Lynch, asking his colleagues in India to get in touch with their central bank contacts "to see what's going on".

Lynch, spokespeople for the Office of the U.S. Trade Representative and the U.S. Embassy in New Delhi did not respond to requests for comment. The U.S. government has not publicly commented on the Mastercard ban.

The RBI did not immediately respond.

A Mastercard spokesman told Reuters, "We've had very constructive engagements with the Indian and U.S. governments over the past few weeks and appreciate the support of both." This includes discussions with the RBI, and Mastercard has "made good progress" as it looks to resolve the situation quickly, he said.

"PANIC", "FULL COURT PRESS"

Mastercard counts India as a key growth market. In 2019 it said it was "bullish on India", a country where it has made major investment bets and built research and technology centres.

The Mastercard ban rattled https://www.reuters.com/world/india/indias-ban-mastercard-hit-banks-card-operations-income-sources-2021-07-15 the company and upset India's financial sector as Indian partner banks fear a hit to their income as they struggle to swiftly partner with new networks to offer cards.

The RBI acted against Mastercard because it was "found to be non-compliant" with the 2018 rules despite the "lapse of considerable time and adequate opportunities".

The rules, requiring foreign card networks to store Indian payments data locally for "unfettered supervisory access", were implemented after failed lobbying efforts of U.S. firms also soured trade ties between New Delhi and Washington.

Mastercard has said it was "disappointed" with the decision. The company has told Reuters it had submitted an additional audit report https://www.reuters.com/world/india/mastercard-submits-new-audit-india-after-ban-over-data-handling-2021-07-30 to the RBI before the ban took effect on July 22.

The U.S. government emails show there was hope things could be sorted out before that.

In one, Lynch told colleagues the understanding was that "the RBI has info they need and are hopeful that they will respond appropriately." But as the ban approached, "if the RBI doesn't change course, I'm sure the panic will resume," he wrote.

Days later, he wrote that Mastercard was continuing "to put on the full court press" in Washington.

(Reporting by Aditya Kalra in New Delhi; Editing by William Mallard)

By Aditya Kalra


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN EXPRESS COMPANY -2.55% 182.31 Delayed Quote.54.73%
LYNCH GROUP HOLDINGS LIMITED -2.54% 3.45 End-of-day quote.0.00%
MASTERCARD 0.61% 360.86 Delayed Quote.0.48%
Latest news "Economy & Forex"
05:53pStocks gain as upbeat Wall St earnings lift outlook
RE
05:45pAIG names new CFO with life and retirement unit split under way
RE
05:36pDogecoin Gained 2.31% to $0.266 at 5 p.m. ET -- Data Talk
DJ
05:36pEthereum Gained 2.90% to $4180.80 at 5 p.m. ET -- Data Talk
DJ
05:36pBitcoin Gained 2.33% to $62546.08 at 5 p.m. ET -- Data Talk
DJ
05:34pUK's Sunak to unfreeze public sector wages, Treasury says
RE
05:33pFacebook ceo zuckerberg - we are seeing a coordinated effort to selectively use leaked documents to paint a false picture of co (corrects spelling of 'paint', removes extraneous word)
RE
05:33pZuckerberg says on track to spend $5 billion on safety and security in 2021 - conf call (removes extraneous word)
RE
05:33pFacebook ceo - will be able to navigate revenue headwinds with new investments-conf call
RE
05:33pThe WSJ Dollar Index Rises 0.07% to 88.12 -- Data Talk
DJ
Latest news "Economy & Forex"