Delhi High Court seeks response from RBI on reports Paytm is breaking the law with “Post Paid” service

By

Isabelle Crossley

Published
May 28, 2019

The Delhi High Court requested the Reserve Bank of India’s response to a public interest litigation accusing Paytm of breaching RBI guidelines with its “Post Paid” service for Paytm Payments Bank customers. 

Online payments business and e-commerce retailer Paytm’s Payments Bank has come under fire for allegedly violating RBI banking guidelines, the Press Trust of India reported. The bank’s “Post Paid” service allows customers to buy items on credit and pay for them the subsequent month with no interest. 

A bench of Chief Justice Rajendra Menon and Justice Brijesh Sethi requested responses from both the RBI and Paytm Payments Bank on their stance on the matter. The court heard the petition which was filed by the financial economist Abhijit Mishra. 

"The Paytm Payments Bank Ltd has been lending to the customers through its Paytm Post Paid, thereby it is clear violation of the guidelines that prohibit lending by the payments bank," read the petition which was filed by advocate Payal Bahl. The plea asked the RBI "to take appropriate punitive actions against the Paytm Payments Bank Limited". The plea also stated that Paytm has launched its Payments Bank without prior RBI approval.

The PIL also accused Paytm of failing to protect customer data. "Paytm Payments Bank by the means of its unauthorised Paytm Post Paid has provided un-monitored and unauthorised access to the personal information such as Aadhaar, PAN, transactions etc. of the its customers to unauthorised third party, thereby clearly violating Article 21 of the Indian Constitution and other relevant banking acts," read the PIL.