INSUBCONTINENT EXCLUSIVE:
Bengaluru: The Supreme Court has directed the RBI to submit within six weeks an affidavit on whether social messaging platform WhatsApp had
complied with the banking regulator’s rules requiring payment service providers to store data locally.
The order on Friday came after a
hearing on a PIL filed by the Centre for Accountability and Systemic Change (CASC), which has sought to stop WhatsApp from launching a
payments service until it complies with the RBI’s circular on data localisation
WhatsApp should also appoint a grievance officer who is based in India, according to the CASC plea.
The April 2018 RBI circular requires all
data related to payment systems to be stored only in India, to ensure better monitoring of payment services providers
In March, the RBI told the top court that WhatsApp had not complied with data localisation rules for its yet-tobe launched payment
service.
WhatsApp’s payment feature, called WhatsApp Pay, is designed to run on the Unified Payments Interface (UPI) — developed by the
National Payments Corporation of India — which allows users to pay others or do business transactions through their bank accounts
Until May this year, the US-based company had only sought approval to mirror or copy payments data within India, while storing the same on
servers overseas.
WhatsApp Pay in Beta Mode Since Feb 2018Once approved, WhatsApp Pay is expected to compete with established payments
service operators Google Pay, Amazon Pay and Paytm.
WhatsApp’s lawyer Kapil Sibal told the apex court on Friday that the encrypted
messaging app has complied with the rules and the company would submit a report to the NPCI soon.
Appearing on behalf of the RBI, additional
solicitor-general Aman Lekhi said details of WhatsApp’s compliance will be submitted to the NPCI in about three to four weeks, following
which the RBI will take a further two weeks to file its report before the top court.
“The bench granted RBI time of six weeks to file the
If the same is not done, the petitioner will be at liberty to amend the petition and the Bench will hear it accordingly,” said Virag
Gupta, an advocate representing CASC.
The Facebook-owned WhatsApp — which has about 400 million users in India — declined to comment on
An email sent to the RBI did not elicit a response.
WhatsApp Pay has been in beta mode since February last year and is restricted to 1
million users in the country pending regulatory approval.
“We’re excited to have launched a successful pilot of WhatsApp Payments on the
UPI standard, and we are looking forward to expanding it,” Will Cathcart, global head of WhatsApp said last week
“We can’t wait to provide this service to our users across India this year.”
Separately, IT minister Ravi Shankar Prasad asked
WhatsApp last month to appoint a grievance officer based in the country
WhatsApp has so far resisted the demand, saying the rules do not require that
Its India grievance officer, Komal Lahiri, is currently based in the United States.
WhatsApp is also fighting a government demand to enable
traceability on its platform, arguing that it would violate user privacy.