RBI directs payment operators to store data in India

The Reserve Bank of India (RBI) has asked payment operators in India to store their transaction data only in India. The RBI has directed the payment operators to comply with its order by October 25, 2018. In case the transaction involves foreign leg, the data can also be stored in the foreign country if required, as per the RBI directive.

“All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction,” the RBI notification stated.

Payment operators, including Visa, MasterCard, Google, Paytm, have been given six months to comply with the order. Many Asian countries, including China, Japan, Malaysia, among others, follow the same data storage rule.

The RBI has issued the directive after it noticed that the payment operators were not storing payment data in India. “In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers/intermediaries/third party vendors and other entities in the payment ecosystem,” the RBI notification stated

With the rise in digital payments, it has become imperative for the RBI to monitor the transactions so as to prevent frauds and scams. The move will help it to monitor all digital transactions and nip any mischief in the bud.