The Reserve Bank of India is unlikely to extend the October 15 deadline for the payments ecosystem players to set up facility to store transaction-related data in India. Those players that do not comply with the central bank’s April 2018 circular could face penalties and restrictions on operations.
According to sources close to the development, of the 78 entities that have been allowed to set up and operate payments systems in India, about 60 have already complied with the requirement to store payments data in India (or data localisation). The banking regulator, in April, had issued a circular to all payments players in the country, directing them to store payments and financial data in the country.
Underscoring that six months have been given for compliance with the data localisation requirement, a senior banker said the central bank is in no mood to grant an extension.
The underlying message to payment system entities, which participated in a meeting on Wednesday at the RBI, is that they have to fall in line with the regulatory requirement or else face regulatory action.
While all Indian companies in the payments ecosystem will be compliant with the RBI deadline, foreign players, such as card payment networks, want the RBI to be more liberal with the data-localisation criteria. Foreign players, such as Amazon Pay and WhatsApp, are understood to have met the RBI criteria.
Vishwas Patel, CEO of CC Avenue, a domestic payment gateway, said the RBI should differentiate between the various categories of payment companies – domestic digital players, international tech companies doing payments in India, and card networks.
“We are only worried about card networks (MasterCard and Visa) and hope that the RBI at least gives them some extension,” said Patel.
“The RBI has a fair ask here, but they seemed to have rushed the matter. Global companies should have been given at least a 12-month horizon, with more clarity on guidelines around data storage, how much to store, what to store, and the tenure. It is not about putting a hardware somewhere, it is also about processes and it takes time,” said Sanchit Gogia, Chief Analyst, founder and CEO at advisory firm Greyhound Research.