US official privately criticised RBI ban on Mastercard

A senior US trade official privately criticised India’s July decision to ban Mastercard Inc from issuing new cards, calling it a “draconian” move that caused “panic”, a global news wire reported.

The documents show frustration within the US government after India’s central bank banned new card issuance by American Express and Diners Club International in April, then took similar action against Mastercard 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 US officials in Washington and India as they discussed next steps with Mastercard, including approaching the RBI, the government emails show, the report said.

“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 US Trade Representative for South and Central Asia, wrote on July 16, two days after the Mastercard announcement, the report said.

“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 US Trade Representative and the US Embassy in New Delhi did not respond to requests for comment. The US government has not publicly commented on the Mastercard ban.

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