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WhatsApp Will Launch Payment Services Only After It Complies With RBI Norms

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On Friday, instant messaging app, WhatsApp, told the Supreme Court that it is currently conducting a trial run on its payment service and will only launch the full product after it complies with the RBI norms on data localisation, according to a PTI report.

 

WhatsApp Will Launch Payment Services Only After It Complies With RBI Norms

The report further said that the trial run will be completed by the end of July 2019.

In a hearing over a plea filed by an NGO, Centre for Accountability and Systemic Change (CASC), which has claimed that WhatsApp has not fully complied with RBI's circular which prescribed data localisation norms, senior advocates Kapil Sibal and Arvind Datar representing the messenger app owned by US-based Facebook, told the bench that they are only having a trial run and the payments services will not be launched without fully complying with RBI norms.

Advocate Virag Gupta, appearing for the NGO, pointed out that WhatsApp was allowed to run the trial of its payments services with one million users and according to RBI's circular dated 6 April 2018, he said that trial data of users cannot be allowed to be kept outside India.

"This may be violative of permission granted by National Payment Corporations of India (NPCI) to Whatsapp," he said. To which, Sibal said that there was no formal agreement between WhatsApp and NPCI till now.

Solicitor General Tushar Mehta, appearing for the Centre, said that WhatsApp was not complying with data localisation norms and was made evident from the affidavit filed by the RBI. The bench said that if norms laid down by RBI are not followed by Whatsapp, it can be prosecuted.

On 1 February, the apex court had sought response from RBI on the plea of NGO. Earlier on 14 January, the top court had allowed the NGO to implead RBI as party in the case.

 

In its petition, the NGO has sought direction to restrain WhatsApp from proceeding with its payment service unless it fully complied with the provisions of the RBI.

While WhatsApp had earlier told the court that it has appointed a grievance officer for India, the NGO has claimed that the grievance officer has been appointed in the United States of America, which is "preposterous and against the sovereignty of India".

"WhatsApp is a foreign company with no office or servers in India. To run Payments Service in India, WhatsApp is obligated to have its office and payments in India," it said.

Story first published: Saturday, May 4, 2019, 15:36 [IST]
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