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WhatsApp Yet To Comply With Data Localisation Norms

The Reserve Bank of India (RBI) has said that the popular messaging platform WhatsApp is not in compliance with the central bank’s data localisation norms in India. RBI’s comments come as a response in an affidavit, reviewed by TOI, filed with the SC on Wednesday after the apex court made the central bank a party to a writ petition in January.

This is the first time the central bank has made an official statement on WhatsApp’s payments business and compliance with data localisation. WhatsApp, which is owned by social networking giant Facebook, has now been operating its payments business — WhatsApp Pay — in beta-mode for a year, restricted to one million users. The RBI also said it is exploring regulatory actions to expedite compliance of data localisation. However, it is being cautious to make sure a consumer’s transaction experience is not disrupted by any such measures.

Centre for Accountability and Systemic Change, an NGO, had filed the petition challenging WhatsApp’s compliance standards and absence of a local grievance officer here. “As informed by National Payments Corporation of India (NPCI) on November 16, 2018 and February 5, 2019, WhatsApp is non-compliant with the RBI circular (on data localisation),” RBI’s response in the affidavit said. WhatsApp entered payments in India through Unified Payments Interface (UPI), which is run by NPCI. The original petition also challenged the Menlo Park-based company of non-payment of local taxes.

The RBI has maintained that payments service providers and third-party payments app should follow its April 6 circular on data localisation, which mandates storage of key payments data only in India. The operative word here is — only which payments companies had requested the RBI to omit. The RBI did not entertain the request.

Sources said WhatsApp’s newly appointed head for India — Abhijit Bose — recently met NPCI MD & CEO Dilip Asbe in Mumbai to discuss the regulatory concerns and hoping to accelerate the process of obtaining a final nod to roll out its payments service full-scale. For WhatsApp, India is its largest market with over 200 million monthly active users here. An email sent to WhatsApp India spokesperson did not elicit a response at the time of going to press.

In October last year, WhatsApp said it built a system that stores payments-related data locally in India. NPCI, however, thought it was not enough since WhatsApp was merely mirroring or copying the payments data in India. It keeps the same in its overseas servers as well.

Issues related to fake news and the government’s request to allow message traceability have only added to WhatsApp’s woes in India, ahead of general elections. TOI had previously reported how these non-payments issues have also emerged as a roadblock for the company’s payments operations here. To be sure, foreign payments players like Mastercard, Visa, Google and others are still in the process of complying with RBI’s data localisation guidelines. According to industry sources, these companies have given various timelines within 2019 by when they expect to be fully compliant with the norms.―Times of India


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