As many as five private sector banks, including Axis Bank, Yes Bank, and IndusInd Bank, are to be impacted by the Reserve Bank of India’s decision to ban Mastercard from issuing new cards for not complying with local data storage guidelines, according to a report.
HDFC Bank would also have been affected by this decision but the lender is already facing restrictions by the RBI on issuance of new cards (debit, credit or prepaid). Besides these five banks, Bajaj Finserve and SBI Card may face problems as they were also issuing cards of this payment gateway.So, in all, as per the report of global bokerage firm Nomura, seven financial institutions would not be able to issue new card as they sourced significant number from Marstercard.The issuance of new cards through another payment gateway would take 2-3 months because it involves technology integration and other modalities.
“Among credit card issuers including co-brand partners, RBL Bank, Yes Bank and Bajaj Finserv lending are most impacted, in our view, as their entire card schemes are allied with Mastercard,” the report said.
As per the report, RBL Bank, Yes Bank and Bajaj Finserv were fully dependent on Mastercard for card issuance while dependence of IndusInd Bank, ICICI Bank and Axis Bank varied from 35 per cent to 40 per cent.