Will Not Start Payments Business In India Without RBI Nod: Whatsapp Tells SC [Read Order]

Whatsapp Inc. submitted an undertaking in the Top Court on Wednesday, stating that it shall not begin operations in India without complying with payment norms for compliance.

A bench comprising Chief Justice SA Bobde & Justices Indu Malhotra & Hrishikesh Roy sought responses from Whatsapp and Facebook on the RBI permissions which allow payment through a UPI enabled network.

The court was hearing an application by an NGO named Good Governance Chambers (G2 Chambers) praying for non-grant of permissions to the social media giants to expand its operations in the Indian Digital Payment Market through UPI.

Senior Advocate Kapil Sibal appeared for the Respondent(s) and assured the court that Whatsapp shall not expand/ initiate business via payments without an RBI nod.

The bench at this juncture, added that pendency of the instant PIL shal not come in the way of RBI granting permissions and listed the matter after 3 weeks.

G2 Chambers had filed the plea highlighting the alleged "blatant" and "willfull violation" of Whatsapp to comply with the Mandatory Guidelines & Regulatory norms of UPI system of India which was a "direct threat to national security".

The petitioner averred that permissions were being granted by the National Payments Corporation of India to Whatsapp in order to "carry out its activities in complete disregard and contravention to the public policy and welfare of citizen's of India".

The petition further emphasises on the billion dollar deal between Facebook-owned Whatsapp and Reliance (Facebook -Jio Deal) which would give access to the giants to a huge Indian Market and in turn "even larger user data".

The plea contends,

"WhatsApp platform is prone to security breaches and has been to have compromised its user's data for its own financial gains as already elaborated in the Writ Petition. Moreover, at the time of present pandemic, the user data of more than 267 million users of Facebook (Respondent No.10) was reported to be sold on Dark Web (overlay online networks), which by itself is a very serious concern of national data security reported several times in the past."

Additionally, the plea highlights the reliance of Indians on digital payment interfaces in light of the Coronavirus induced lockdown where online purchases and payment of utility bills via online mode has become common.

"This leads to increased use of technology and thus generates big data. Thus, Data has become more important than ever in the present situation. Under this situation, the aforesaid deal between Respondent No.10 and Reliance Jio is also reported to accelerate its operations in Digital Payments and E-commerce sector" - Excerpt from Petition

In view of the above, the petitioner has stated that this unregulated access of banking information and payment data at the hands of Whatsapp would mean compromising millions of Indian Bank accounts and passwords.

Pointing to the urgency of the issue, the petitioner has stated that it is pertinent that permissions are not granted to Whatsapp as the "regulators and banks will also not be able to offer immediate help as this data is processed and stored out of the country". 

Shri Krishnan Venugopal, Senior Advocate along with Advocates Mr. Deepak Prakash, Mr. Yasir Rauf, Ms.Suneha Jain and Mr. Gaurav Sharma (AOR) appeared for petitioner(s)

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