UPSC Express

Headline : WhatsApp yet to comply with data localisation norms: RBI

Details :

The News

• Recently, the RBI has made the revelations that WhatsApp is not in compliance with RBI’s data localisation norms.
• This is the first time ever that the Reserve Bank has made any statement about WhatsApp’s payments business and compliance with data localization norms.

 

Data localisation norm of RBI

• As per the Reserve Bank of India’s (RBI) norms, payment firms were supposed to store all their data in India from mid of Oct, 2018.

 

Background

• In 2018, WhatsApp started operating its payments business, “WhatsApp Pay”, restricted to one million users.
• In January 2019, a writ petition was filed by an NGO challenging WhatsApp’s compliance standards and absence of a local grievance officer.
• After the Supreme Court made the RBI a party to a writ petition, RBI responded in an affidavit that WhatsApp is not in compliance with RBI’s data localisation norms.
• However, WhatsApp have started only storage mirroring in India, which is not sufficient according to National Payments Corporation of India (NPCI).
• The RBI is exploring regulatory actions to expedite compliance of data localisation.

Note: Data mirroring is the process of storing and maintaining copies of a database in another network or location.

 

About National Payments Corporation of India (NPCI)

• National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments in India.
• It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks Association (IBA) for creating a robust Payment & Settlement Infrastructure in India.

 

Other Issues with WhatsApp

• Besides issues with data localisation, WhatsApp has also been facing problems with its core messaging service.
• It has been running into trouble with the Indian government over the spread of fake news on its platform.
• Free messaging has reportedly fuelled hate crimes in the country.

 

Conclusion

• India is whatsApp’s largest market with 200 million active users. WhatApp have to act quickly with a timeline if it plans on a full-scale roll-out of its payment service.