Indian court asks central bank to confirm WhatsApp's compliance with local data rules

[August 02, 2019]  By Sankalp Phartiyal

MUMBAI (Reuters) - India's top court has given the central bank six weeks to report on whether WhatsApp had complied with data localization norms as the Facebook-owned messenger gears up to launch a payments service in the country, a person involved in the matter said.

WhatsApp has been testing a peer-to-peer payments service for over a year in India, its biggest market by users, but local data storage norms have delayed an official launch.

Foreign payment companies were caught off guard last year by the Reserve Bank of India's (RBI) directive that said all payments data should be stored "only in India" for "unfettered supervisory access". [nL4N1U74H2]

This June it clarified the rules saying foreign payment firms can process transactions made in India outside of the country but the related data should be brought back for local storage within 24 hours. [nL4N23X32U]

WhatsApp faced an additional hurdle as a Delhi-based think-tank, the Centre For Accountability And Systemic Change, alleged in a petition to the Supreme Court last year that the firm was not compliant with payments data localization rules.

It is in regard to this petition that the Supreme Court has now asked the RBI to file a response.

WhatsApp did not immediately respond to a request for comment while the Reserve Bank of India declined to comment.

The WhatsApp messaging application is seen on a phone screen August 3, 2017. REUTERS/Thomas White/File Photo

Last week, WhatsApp's global head Will Cathcart said WhatsApp was all set to roll out its payments service in India this year and that it was now in full compliance with the data localization norms. [nL4N24R24A] [nL4N1WP2FQ]

On Friday, the Supreme Court also asked the federal government to make clear, within six weeks, its position on whether the company's grievance officer should be based in India, according to the person.

WhatsApp has a California-based grievance officer who handles India-related issues. Current Indian rules do not mandate a tech company to have such an executive stationed in the country - a rule the government wants to change.

The country's technology minister has said in parliament that New Delhi is seriously considering that social media firms "be required to locate their grievance officer in India".

WhatsApp has previously said it is working on having a grievance officer based in India.

(Reporting by Sankalp Phartiyal, additional reporting by Swati Bhatt; Editing by Euan Rocha and Himani Sarkar)

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