The Reserve Bank of India has told the Supreme Court that it has not granted permission to Whatsapp to go live for full-scale operations on Unified Payments Interface (UPI) system.
The RBI further told that it "concerned that WhatsApp was storing some payment data elements outside India beyond the permitted timelines indicated in the circular and the Frequently Asked Questions on 'Storage of Payment System Data' issued by RBI on June 26, 2019" thereby stating that it was not to go live until all norms were met by the company.
In the light of this, it advised the National Payments Corporation of India (NPCI) to ensure that that the payment data elements as referred to therein are not stored by WhatsApp outside India beyond permitted timelines. In addition, NPCI was advised to ensure that WhatsApp does not store any of the payment transaction data elements in hashed / de-identified / encrypted form in its systems outside India. NPCI was also advised not to permit WhatsApp to go live for full scale operations on UPI payment system, till the time they are fully compliant
Later, the National Payments Corporation of India (NPCI) has informed that Whatsapp has complied with norms and regulations pertaining to the storage of data by payment systems vis-à-vis its proposed Whatsapp Pay services.
The RBI made the comments in its response to a court notice, seeking its stand on a petition by an NGO which wanted to stop WhatsApp from carrying out trials of its payment service in India before it complied with local regulations.
Vide an affidavit filed before the Top Court on July 27 in the case Centre for Accountability for Systematic Change (CASC) v. Union of India, the RBI states,
"RBI always weighs and explores the available regulatory options to ensure expeditious and complete compliance with the circular requirements and has been continuously taking up the matter with NPCI, which has resulted in the compliance from WhatsApp."
RBI also states that the NPCI had communicated it the System Audit Report and the Post Change Review Report sent to it by WhatsApp, which touched upon the details concerning storage of payment system data.
The RBI said that by letter dated November 1, 2019, the NPCI was advised to ensure that the payment data elements, as referred to therein, are not stored by WhatsApp outside India beyond permitted timelines.NPCI had communicated to the RBI that it would work closely with WhatsApp for resolution of the same by May 31, 2020, says RBI with respect to the remaining three issues.
The NPCI had then requested RBI's approval to grant final 'go-live' to WhatsApp on UPI, subject "to (a) the third-party audit report confirming closure of the committed 2 items, and (b) acceptable VA/config reports from third party auditor".
WhatsApp had already informed the top court that it would not roll out its payment service without full compliance with the norms.