The ban imposed by the Reserve Bank on MasterCard mainly affects private banks and non-bank financial institutions. Five private banks and one non-bank financial institution will be most affected by the decision. Issuance of new cards may be delayed for a few months as you have to switch to other card companies.
Financial institutions such as RBL Bank, Yes Bank, and Bajaj Finserv will be the main victims. The card system of these institutions is fully implemented in collaboration with MasterCard. These banks are not affiliated with Visa and Rupee cards. About 40 percent of transactions of Axis Bank, ICICI Bank, and IndusInd Bank are in association with MasterCard. About 45% of HDFC Bank’s credit card transactions are in association with MasterCard.
RBL Bank has informed the Stock Exchange that it has reached an agreement with Visa. However, it is reported that it will take 8-10 weeks to complete the procedure and issue the card. The bank used to issue around one lakh cards every month.
Credit and debit cards are issued in association with Yes Bank MasterCard. You will have to switch to other payment networks to issue new cards. About 86 percent of SBI card transactions are with Visa.
MasterCard, an American payment card company, has been banned by the RBI for failing to comply with the guidelines for storing card, customer, and transaction details on servers in India. New cards will not be issued after July 22. At the same time, the decision will not affect those currently using MasterCard.