Won't start payment service without following RBI norm: WhatsApp assures SC

Plea in top court alleges WhatsApp not following data localisation norms released by RBI on April 6, 2018

Facebook-owned messaging platform WhatsApp Inc on Friday assured the Supreme Court that it would not begin its payment services in India until it full complied with the domestic data storage norms of the Reserve Bank of India (RBI). The company said it was still conducting trials on its payments solutions services, which is likely to be completed by July.

A two judge Bench of Justices Rohinton Fali Nariman and Vineet Saran was hearing a plea moved by Centre for Accountability and Systemic Change (CASC), a Non-Government Organisation (NGO) which had alleged that WhatsApp had launched its payment services without having fully complied with RBI’s directives on data localisation norms. WhatsApp, however, said that it was only conducting trials on about one million users for now.

The banking regulator had on April 6, 2018 issued norms for storage of data of payment systems, in which it had said that all system providers must ensure that all the data related to payment systems must be stored in a system only in India.

“This data should include the full end-to-end transaction details or information collected and carried or processed as part of the message or payment instruction. For the foreign leg of the transaction, if any, the data can also be stored in the foreign country, if required,” RBI had said. The systems providers had to ensure compliance of these norms within six months and submit a compliance report to the banking regulator by October 15, 2018.

A system audit report, conducted by a CERT-IN empanelled auditor, would also have to be submitted by the payment service providers, RBI had then said.

During the hearing on Friday, the central government supported CASC’s stand and said that WhatsApp had indeed not complied with the data localisation as was evident from the reply filed by RBI, which prompted the court to observe that the messaging platform would be prosecuted if it did not follow the norms.

“Don't worry our arms are long enough. They cannot escape the law," the two judge Bench said, adding that they would hear the matter in July as it required detailed hearing. On Friday, WhatsApp also told the court that it was looking into the issue of a grievance officer for India.

On August 27 last year, the top court had agreed to examine CASC’s plea which had alleged that WhatsApp was not complying with Indian laws including the provision for appointing a grievance officer. The messaging platform has over 200 million users in India which is one of the largest bases for it. The company has over 1.5 billion users globally.