PIL against Paytm post paid wallet RBI company oppose it

first_imgNew Delhi: The Reserve Bank of India Wednesday told the Delhi High Court that a Public Interest Litigation (PIL) cannot be used as a weapon to challenge the financial or economic decisions taken by the government or the RBI. The RBI made the submission in response to a PIL alleging that online payments platform Paytm was providing lending facilities in violation of the law regulating such activity. The affidavit was filed before a bench of Chief Justice D N Patel and Justice C Hari Shankar which has listed the matter for further hearing on September 18. The petition filed by Abhijit Mishra, a financial economist, claimed that Paytm Payments Bank Ltd’s ‘post paid’ service was operating contrary to the existing law and guidelines regulating such entities. It contended that RBI’s guidelines for payments banks, like Paytm, do not permit credit or loan disbursement activities by such entities. In its affidavit, RBI said that section 22 of the Banking Regulation Act empowers the RBI to issue banking licence to a company to carry on banking business in India, subject to certain conditions provided in this provision. Also Read – Thermal coal import may surpass 200 MT this fiscal”Upon an application made in this behalf by respondent 2 (Paytm), a licence to carry on banking business in the style of a ‘payments bank’ has been issued by the RBI subject to certain conditions enumerated in the licence itself. These conditions along with the operating guidelines issued by the RBI, specify the broad contours within which a payments bank is required to operate, strictly adhering to the same,” it said. Seeking dismissal of the plea, the central bank said Mishra has sought the relief against Paytm but he has made RBI the first party as he might be aware that a PIL would not lie against a private body and is indirectly attempting to misguide the court. “For initiating action under the relevant provisions of the BR Act, RBI has to satisfy that Paytm has acted in such a manner which is detrimental to the interests of the depositors. No action can be initiated solely on the baseless allegation of the petitioner. Hence, no relief should be granted to him,” RBI said in its affidavit. Paytm also opposed the petition claiming that the plea was based on incorrect facts and incorrect understanding of law. In its response, it said the Paytm application is owned by One97 Communications Ltd which was engaged in the business of providing payment solutions, providing services related to electronic payments and selling of digital good on its mobile application.last_img read more