Reserve Bank of India (RBI) issued the command on June 26, 2019, stating that the companies can process transactions made in India outside of the country, but the related data must be returned for local storage within 24 hours. The action was taken by BRI to stop the free flow of the country’s financial data.
Last year in April 2018, the US government and American companies lobbied to have the rules diluted after the issuance of the order. Companies stated that the directive would result in higher infrastructure costs and be detrimental to investment plans. The requests and efforts of keeping the system intact were ruled out.
Announcement on Wednesday was made to clarify the process. It was not clear before regarding whether data can still be processed abroad or must be registered and monitored locally.
“The entire payment data shall be stored in systems located only in India. In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier. The same should be stored only in India.” RBI said.
The data will provide unfettered supervisory access” and help authorities in conducting investigations.
RBI has allowed keeping a copy of international transaction abroad, only if required.
The softer guideline for data storage was enforced and backed by strong lobbies. RBI has issue strict guideline that prohibits the free flow of the financial data outside the country. International payment companies (Pay-Pal, Google Pay, Amazon Pay, Visa, Mastercard, American Express) have found the new decree quite problematic, it will relief the firms from additional accountabilities.
“There is no bar on the processing of payments transactions outside India if so desired by the payment system operators (PSOs). However, the data shall be stored only in India after the processing,” Said spokesperson of Reserve bank of India.
