RBI had asked payment system providers to ensure that the entire data relating to payment systems operated by them is stored in a system only in India. 
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RBI had asked payment system providers to ensure that the entire data relating to payment systems operated by them is stored in a system only in India. The Reserve Bank of India (RBI) has barred American Express and Diners Club from onboarding new domestic credit card customers from May 1 for violating the central bank's norms on storage of payment systems data.
Through a circular in April 2018, RBI had asked payment system providers to ensure that within a period of six months the entire data (full end-to-end transaction details/information collected/carried/processed as part of the message/ payment instruction) relating to payment systems operated by them is stored in a system only in India.
Besides, they were also required to report compliance to RBI and submit a board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified.
However, RBI said American Express Banking Corp and Diners Club International Ltd were found to be non-compliant with the directions on storage of payment system data.
Accordingly, RBI "imposed restrictions on American Express Banking Corp. and Diners Club International Ltd. from on-boarding new domestic customers onto their card networks from May 1, 2021".
However, the order will not impact the existing customers of the company, it said.
In a statement, American Express expressed its disappointment on RBI's action and said it is working with the central bank to resolve the issue.
"We have been in regular dialogue with the Reserve Bank of India about data localization requirements and have demonstrated our progress towards complying with the regulation. While we're disappointed that the RBI has taken this course of action, we are working with them to resolve their concerns as quickly as possible. This does not impact the services that we offer to our existing customers in India, and our customers can continue to use and accept our cards as normal," the company said.
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