Data Localisation – RBI cracks the whip on AmEx and Diners Club

The Reserve Bank of India (RBI) informed to the public at large that, by order dated April 23, 2021, it has 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.

This action was necessary as these entities have been found non-compliant with the RBI directions on Storage of Payment System Data.

Reserve Bank of India has clarified that the order will not impact existing customers. The order only restricts onboarding new customers

American Express Banking Corp. and Diners Club International Ltd. are Payment System Operators authorized to operate Card Networks in the country under the Payment and Settlement Systems Act, 2007 (PSS Act).

The following are the present AmEx Card Variants, available in India:

·        American Express Platinum Card

·        American Express Smart Earn

·        American Express Membership Rewards

·        American Express Platinum Reserve

·        American Express Gold Card

·        American Express Platinum Card

·        Jet Airways American Express Platinum

AmEx card volumes for the last few months are us under: -

 

Diners Club operates as a co-branded card with HDFC Bank hence independent card statistics are not in public domain

The following are Diner Club Card Variants, available in India :

·        Diners Club Black

·        Diners Club Privilege

·        Diners ClubMiles

·        Diners Club Premium

·        Diners Club Rewardz

 

Each card variant has different privileges.

QUOTE

 

1950

DINERS CLUB BECOMES THE WORLD’S FIRST MULTIPURPOSE CHARGE CARD

For businessman Frank McNamara, forgetting his wallet while dining out at a New York City restaurant was an embarrassment he resolved never to face again. Luckily, his wife bailed him out and paid the tab.

A year later in February 1950, he returned to Major’s Cabin Grill with his partner Ralph Schneider. When the bill arrived, McNamara paid with a small cardboard card, known today as a Diners Club Card. The event was hailed as the First Supper, paving the way for the world’s first multipurpose charge card.

UNQUOTE

Background for RBI Press Release dt 23^rd April, 2021.

RBI takes supervisory action on Card Networks – American Express Banking Corp. and Diners Club International Ltd

 

In terms of RBI circular on Storage of Payment System Data dated April 6, 2018, all Payment System Providers were directed 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.

 

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 therein.

 

Disclaimer: These are my personal views only. The bottom line is Mission #LessCashNotCashLess

Good to read: -

Our card members come from all walks of life: Manoj Adlakha, American Express

 

 

e-insurance in India April 2012 Deadline

IRDA is working to put life policies in electronic form.

April 2012 is the deadline for insuance companies to start issuing insurance policies in electronic form.

To meet this deadline, "Stock Holding Corporation, Central Depository Services Ltd, NSDL, Karvy Computers and Computer Age Management Services are working with the insures and the regulator to put in place the procedure and iron out any possible issues that may arise in the process," Sohanlal Kadel, president, Insurance Brokers Association of India said in Kolkata on Friday.

The rollout plan is as under: -

In the first phase, Life Insurance Policies will be issued electronically. This is because, most of the terms and conditions of life insurance policies are similar making it  easier for all the players to adopt dematerialisation for such policies.

The next phase will be for general insurance policies/motor policies and health covers.

The major challenge would be in introducing dematerialisation for general insurance covers.

Majority of  large General insurance covers are tailor-mode with the terms and conditions varying for each client. Hence, a large number of permutations and combinations have to be incorporated into the demat system, which might delay the introduction of e-insurance policies for large general insurance covers.

The relevant guideline by IRDA on introducing e-insurance was floated by IRDA in early 2010.

IRDA’s Guidelines in a nutshell for issuing policies electronically: - 

The Insurance Regulatory and Development Authority (IRDA) have laid down guidelines for issuing policies electronically which should reduce transaction costs and ensure swift modifications in policies. They even issued the guidelines for repositories, which compile and store data about policyholders on behalf of the insurance companies.

The IRDA said, “The objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in an electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy. All such insurance policies in electronic form shall be treated as valid insurance contracts”.

According to the guidelines insurers issuing e-insurance policies shall have to take the services of a registered repository. A certified insurance repository has to have a net worth of at least Rs 25 crore, without any foreign investment, and wherein no insurance company can hold over 10% or hold any managerial position.

“The insurance repository before commencing the operations shall put in place measures to safeguard the privacy of the data maintained and adequate systems to prevent manipulation of records and transactions,” the IRDA said..

As a safe ePayments motivator, I believe that this change in issuance of insurance policies will not only benefit insurance players but also aid in increasing value for ePayments.

As sensitive information is part of the Insurance policies, the insurance companies and the insurance repositories must develop adequate security policies to,

01) ensure that no personal information is leaked.

02) the computer network is not hacked

03) ensure that employees are aware of the distinction of ‘private information’ and ‘need-to-know’, information