The Reserve Bank of India has told the Supreme Court in the case of Binoy Viswam vs. Reserve Bank of India said that the responsibility to ensure that tech giants like Whatsapp, Google and Amazon comply with rules and regulations governing Unified Payments Interface platforms, lies not with the RBI but with the National Payments Corporation of India.
The affidavit was filed in a plea by Communist Party of India MP, Binoy Viswam seeking directions to ensure that the data of Indian citizens collected on UPI platforms is not misused by corporations.
It is pertinent to mention here that UPI is a real-time payment system developed by the NPCI for facilitating inter-bank transactions and works by instantly transferring funds between two bank accounts on a mobile platform.
NPCI is the owner and operator of UPI, i.e. NPCI is the system provider as per the PSS Act. The system rules, principles and procedural guidelines for operation and participation in UPI are formulated by NPCI.
It is pertinent to take note of Sections 20 and 21 of the PSS Act that empower the system providers. It is important to note that the RBI does not give any approval / authorisation to TPAPs thus they are not system providers as defined in Section 2(q) of the PSS Act.Supreme Court bench of Chief Justice of India SA Bobde and Justices AS Bopanna and V Ramasubramanian had issued notice in Binoy Viswam’s plea in October 2020.
NPCI is the system provider of UPI and, therefore, comes under the regulatory radar of RBI. Since it was NPCI that allowed Amazon, Google and WhatsApp to operate under UPI, the responsibility to ensure that these entities comply with all the Rules / Regulations / Guidelines governing UPI lies with NPCI.