India's central bank Wednesday banned global payments giant Mastercard from adding new customers starting next week, in an escalation of a long-standing dispute on local data storage rules.

The Reserve Bank of India (RBI) found Mastercard to be in violation of its April 2018 circular that directed all payments data be stored exclusively in India, allowing the regulator "unfettered supervisory access" to transaction details.

Global payments service providers like Mastercard, Visa and American Express have lobbied against data localisation, citing increased costs.

"Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data," the RBI said in a notification.

Mastercard will be indefinitely blocked from issuing debit, credit or prepaid cards to customers in India from July 22.

India's central bank banned global payments giant Mastercard from adding new customers starting next week
India's central bank banned global payments giant Mastercard from adding new customers starting next week AFP / KAREN BLEIER

The central bank said existing Mastercard customers would not be affected.

Mastercard did not immediately respond to queries from AFP.

Last year, Mastercard accounted for 33 percent of all card payments in India according to London-based payments startup PPRO.

American Express and Diners Club International were also indefinitely barred by the RBI from issuing new cards to customers from May for the same reasons.

Global payments card companies have faced increasing competition from India's United Payments Interface (UPI) transactions that offer card-less and cashless payment options using phone numbers and QR codes.

A record 2.8 billion UPI transactions worth some 5.5 trillion rupees ($73.8 billion) took place in June.