India proposes relaxing data storage rules for payment firms

By NT Bureau Published on Jul 12, 2018 03:29 PM IST

Chennai:  India'’s Finance Ministry has proposed relaxing a directive from the country’s central bank to compel global payment firms to store customer data locally, following weeks of intense lobbying by US companies and trade bodies.

In a meeting held in June with RBI officials, the ministry had said a possible solution could be that companies store a copy of the data in India as well as storing it elsewhere.

The proposal comes as a relief for companies including MasterCard, Visa and American Express that fear India’s data onshoring move could cost them millions of dollars and set a precedent for other major governments to implement similar rules at a time when there is heightened scrutiny on how companies globally handle their customers’ data.

Foreign payment companies were caught off guard in April by the Reserve Bank of India’s (RBI) one-page directive that said all payments data should within six months be stored only in the country for 'unfettered supervisory access'.

The companies were most concerned about the directive to store the data only in India with restrictions on cross-border storage or movement.

The Ministry has also proposed clarifying the kind of data that needed to be stored and the time given to implement the directive, a report stated.