Delhi HC seeks RBI's stance on plea regarding PayPal's 'unauthorised' operations in India
According to the petitioner, Paypal Payments Private Limited is not listed as an authorised operator as per the list of the ‘Payment System Operators’ published by the RBI on May 27, 2019.
The Delhi High Court has issued a notice to global payments major PayPal and asked the company to stop the allegedly illegal and unauthorized operations in India immediately.
In a petition filed by Abhijit Mishra, he alleged that PayPal has violated Section 4(1) of the Payment and Settlement Systems Act, 2007 which states that no person other than the Reserve Bank, shall commence or operate a payment system except in accordance with an authorisation issued by the RBI.
According to him, PayPal Payments Private Limited is not listed as an authorised operator as per the list of the ‘Payment System Operators’ published by the RBI on May 27, 2019.
The petitioner also alleged that PayPal has unauthorised access to the personal information of the citizens such as Aadhaar and PAN, thus violating Article 21 of the Constitution of India.
The notice was issued by a Division Bench of Chief Justice DN Patel and Justice C Hari Shankar to the Reserve Bank of India (RBI) and PayPal, reports Bar & Bench.
The petitioner also demanded to impose a penalty on PayPal under the FEMA and Rules as he alleged that the company is operating as a foreign exchange dealer and that is against Section 10 of the Foreign Exchange Management Act (FEMA) and the Prevention of Money Laundering Act.
He further asked for an investigation by the Enforcement Directorate to transfer the PayPal’s allegedly illegal profits to the Prime Minister’s Relief Fund. The hearing for the matter is scheduled on September 18.
PayPal started its Indian operations in November 2017 for facilitating cross-border payments for small merchants, entrepreneurs, and freelancers selling goods and services abroad.
The company, which runs an incubation programme, has invested in startups like FtCash, Pine Labs, and CodeMojo, among others. Last year, it also acquired a Palo Alto and Hyderabad based Simility, a fraud prevention and risk management platform, for $120 million in cash.