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Indian Banks’ Association (IBA), a representative body of Indian banks and financial institutions, will discuss the matter of mandatory local data storage with the Reserve Bank of India on behalf of foreign banks. This was decided at a recent meeting attended by IBA officials and foreign banks.
“The IBA would inform the regulator that foreign banks are progressively storing payment data locally. It will also be communicated that importing past data may not be possible,” the source added.
Foreign banks are required to store all payment data related to India only in the country starting January 2025. The data stored in the home jurisdiction of foreign banks since RBI's April 2018 circular also needs to be stored locally.
Sources said foreign banks were finding it difficult to move that data locally.
The regulator further said in case the processing was done abroad, the data should be deleted from the systems there and brought back to India not later than one business day or 24 hours from payment processing, whichever was earlier. The same should be stored only in India.
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Sources said that some foreign banks had changed their systems so overseas payment data could be stored locally. This has been implemented in the last 6-8 months.
Foreign banks are also planning to write to the RBI on the issue, according to sources.
The regulator has been particular about compliance with its norms on data storage by regulated entities.
In 2021, the RBI barred MasterCard from acquiring new debit and credit card customers for not complying with data localisation requirements. Diners Club International and American Express also faced a similar ban from the regulator for not complying with local data storage norms.
Later the bans were lifted once these entities complied with the data storage norms.
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