The Reserve Bank of India (RBI) has today informed the Supreme Court that messaging service WhatsApp cannot operate its in-chat money transfer feature WhatsApp Pay without its permission. The RBI also said no such permission had been given.
During the hearing, the bench of Justice Rohinton Nariman and Vineet Saran told the WhatsApp legal team of Kapil Sibal and Arvind Datar, "RBI says you are not following the law" and asked for an explanation.
In response, they said data servers were located outside India and the product was still in its trial phase and would only be finalised in July, to which the Supreme Court warned, "Our hands are long enough".
The RBI was responding to an order by the court involving a petition filed by the Centre for Accountability and Systemic Change (CASC). The petition claims WhatsApp Pay has failed to comply with a RBI circular that prescribed data localisation norms.
The top court is to further hear the case in July.
The central bank was represented by Solicitor General Tushar Mehta.
The data localisation norms in question relate to the storing of payments-related data within India. WhatsApp reportedly has over 200 million users in the country and is one of the largest bases for the Facebook-owned company that has over 1.5 billion users globally.
In its original plea, CASC said, "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".
"Moreover, it is also required to have a Grievance Officer for users in India. Yet, it is being allowed to continue with its payments and other services, without any check," the plea claimed.
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