Last week, WhatsApp told the Supreme Court that it is conducting a trial run of WhatsApp Pay UPI payments feature and will comply with RBI norms on data localisation before launching the full service. WhatsApp said the trial run is likely to complete by the end of July this year.
A Supreme Court bench of Justices Vineet Saran and R F Nariman was hearing a petition submitted by Centre for Accountability and Systemic Change (CASC) NGO. The petition claims that WhatsApp doesn't fully comply with RBI's circular pertaining to data localisation norms.
Appearing for WhatsApp, Senior advocates Kapil Sibal and Arvind Datar told the bench that WhatsApp is only conducting a trial run of its UPI payments feature and it is likely to be completed by July. They also said that WhatsApp will not launch WhatsApp's UPI-based payment services without adhering to the RBI norms.
"We cannot launch the product without complying with the norms," Sibal said.
Appearing for the NGO, advocate Virag Gupta said that WhatsApp was permitted to conduct the trial of its UPI-enabled payments services with one million users. Citing the RBI's circular dated April 6, 2018, Gupta said that WhatsApp trial data of Indian users cannot be allowed to be stored outside India.
"This may be violative of permission granted by National Payment Corporations of India (NPCI) to Whatsapp," Gupta said.
Responding to that, Sibal said there was no formal agreement between WhatsApp and NPCI till now. Appearing for the Centre, Solicitor General Tushar Mehta said that WhatsApp was not adhering to data localisation norms, citing the affidavit filed by the RBI.
To this, the Supreme Court bench said that if WhatsApp doesn't follow the norms laid down by RBI, then it can be prosecuted.
"Don't worry our arms are long enough. They cannot escape the law," it said. Supreme Court also added that the issue requires detailed hearing and listed the matter in July.
CASC said in its plea that a customer needs to follow KYC norms laid down by the RBI and various other formalities to open a bank account.
"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.
"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.
WhatsApp has more than 200 million users in India and almost one million people are "testing" its payments service. India happens to be one of the largest bases for WhatsApp. WhatsApp has more than 1.5 billion users globally.
(With PTI inputs)