A public interest litigation has claimed PayPal was operating “illegally” in India without RBI authorisation. (Photographer: David Paul Morris/Bloomberg)

Delhi High Court Seeks RBI Response On PIL Claiming PayPal Operating Illegally In India

The Delhi High Court on Wednesday asked the Reserve Bank of India and Enforcement Directorate to respond to a public interest litigation that claimed PayPal was operating "illegally" in India without RBI authorisation.

A bench of Chief Justice DN Patel and Justice C Hari Shankar issued notices to RBI, ED and Paypal Payments Pvt. Ltd. and sought their stand on the PIL before the next date of hearing on September 18.

Abhijit Mishra, a financial economist, has claimed in his plea that "Paypal is operating as a payment and settlements system in blatant violation of the Payments and Settlements Systems Act".

According to him, PayPal does not figure in the list of authorised payments system operators published by RBI on May 27, 2019. According to the PIL, filed through advocate Payal Bahl, PayPal's services are being used by various online travel, clothing and food websites or apps, including Yatra, Makemytrip, Bookmyshow, Domino’s Pizza and Myntra.

PayPal was also "operating as a foreign exchange dealer in contravention of Foreign Exchange Management Act" and "has unmonitored and unauthorized access to the personal information such as Aadhaar, PAN, etc. of the public", the PIL alleged.

Such access to personal information of the public was a violation of Article 21 of the Constitution of India, the plea contended, seeking directions to PayPal to "immediately stop its allegedly illegal and unauthorized operations".

It has also sought probe by investigative agencies against the directors, management and officers of PayPal for alleged malpractice and violation of provisions of Article 21 of the Constitution of India, Payments and Settlements Act, FEMA and Prevention of Money Laundering Act.

Mishra has also sought directions to RBI and ED to take action, including imposition of fines and penalties, against PayPal for the alleged violations.

Bloomberg Quint

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