Delhi HC seeks reply from RBI,SEBI, NPCI on plea seeking regulation of Google Pay, Phonepe, Amazon pay etc.

MATTER IN ISSUE

• A Public Interest Litigation was filed by Advocate Mr. Deepak Prakash on behalf of an applied economistDr. Resmi B. Bhaskaran against Union of India and Others in the Delhi High Court.

• The petition was filed under Articles 226 and 227 of the Constitution for issuance of the writ of Mandamus or any other appropriate writ for framing comprehensive and detailed framework for operation of Techfinslike GooglePay, PhonePe, Amazon Pay etcetera in the Financial Sector in India.

• The PIL sought that the “TechFin” companies be allowed to operate in the country only after having their registered offices here, their necessary approval/ registration from the appropriate financial regulators, the formulation of a strict framework for their entry and operation through any mode (including partnerships with existing financial entities), and their mandatory statutory audit.

CONCEPT OF TECHFIN

• FinTech is the concept where the Finance industry starts using technology to offer better customer experience.

• TechFin solutions are where the Technology Domain enters the Finance sector to change how users interact with the industry.

• NCPI stands for National Payments Corporation of India and enables digital payments and settlement systems in India.NCPI is an initiative of the Reserve Bank of India and Indian Banks Association.

• Currently, NPCI is the sole authority owning and regulating a pan-India digital payments network. There has also been news that the RBI is looking to bolster digital payments competitions with National Umbrella Entities (NUE). NUEs, which are umbrella entities for digital payments, will have the same powers and responsibilities as the NPCI.

PETITIONER’S SUBMISSIONS

• The petitioner alleges that though in the current UPI (United Payments Interface) regime GooglePay, AmazonPay and PhonePe control more than 85% market share, they do not require any authorization from RBI for their entry or operation and are allowed to operate without any supervision from the apex regulatory authority.

• The petition also raises concern that these companies are not held accountable to similar standards as other licensed entities/ intermediaries and that if they are not given an ‘even playing field’ authorized intermediaries will lose business.

RESPONSE OF THE COURT

• A bench of Chief Justice D N Patel and Justice Prateek Jalan was hearing ghe Public Interest Litigation.

• The High Court on December 9th, 2020, sought reply from the Ministry of Law, Finance Ministry,RBI, SEBI and NPCI on the petition filed.

• The Court issued notice to the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) seeking their stand on the plea.

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