Page 8 - Banking Finance July 2022

RBI CORNER

Reserve Bank

RBI lifts ban on Master- businesses. We are glad we have met But the RBI report paints an encour-
this milestone and will continue to en- aging picture of economic activity gain-
card after one year
sure ongoing delivery against the goals ing strength, with most gross domes-
RBI has lifted the ban imposed on and regulatory requirements that have tic product (GDP) constituents exceed-
Mastercard and allowed the card net- been established" it said. ing their pre-pandemic levels. "The
work to onboard new customers for recovery remained broadly on track.
"India is an important market for us,
debit, credit, or prepaid cards, as it is This demonstrates the resilience of the
both in terms of the innovation created
satisfied with the company's compli- economy in the face of multiple shocks
here and the value we deliver to our
ance with the storage of payment data and the innate strength of macro fun-
customers and partners," it said.
norms.
damentals as India strives to regain a
The embargo on the company is being sustainable high-growth trajectory,"
India better placed to
lifted almost a year after it was im- the report says.
posed in July last year. The move will avoid stagflation risk, says
benefit lenders, such as YES Bank and RBI body calls for periodic
RBI report
RBL Bank, which were solely issuing
Even as stagflation risks loom over review of regulations
Mastercard cards before the ban. Citi
some of the major global economies, The Regulations Review Authority
also partnered only with Mastercard
including the US, India is better placed (RRA 2.0), set up by the Reserve Bank
for its credit cards before the ban.
to avoid such a risk, the Reserve Bank of India, has recommended a periodic
"In view of the satisfactory compliance
of India (RBI) says in its monthly 'State review of existing regulations to align
demonstrated by Mastercard Asia /
of the Economy' report, released. them with evolving developments in
Pacific Pte. Ltd. with the RBI circular
industry practices and the financial
dated April 6, 2018 on storage of pay- "In the midst of this increasingly hos-
landscape.
ment system data, the restrictions tile external environment, India is bet-
imposed, vide order dated July 14, ter placed than many other countries In the past, the RRA had recom-
2021, on on-boarding of new domes- in terms of avoiding the risks of a po- mended the withdrawal of 714 regu-
tic customers have been lifted with tential stagflation," the report says. latory instructions, which have either
immediate effect," the RBI said. become obsolete or redundant and
At least 83 per cent of fund managers
have not been explicitly withdrawn.
Mastercard, said in a statement, wel- surveyed by Bank of America Research
comed the decision. "As we have in this month see the global economy fac- Further, the authority has recom-
our engagement with the RBI, we re- ing the risk of stagflation - the phe- mended the elimination of paper-based
affirm our commitment to support the nomenon of rising inflation and slowing returns and has suggested a periodic
digital needs of India, its people and its economic growth. review of regulatory and supervisory

8 | 2022 | JULY | BANKING FINANCE