HC asks RBI, ED to respond to plea alleging PayPal operating illegally

The Delhi High Court today
asked Reserve Bank of India
and Enforcement Directorate
to respond to a plea alleging
that online payment platform
PayPal was operating illegally
without the central bank’s
authorization.

The bench of Chief Justice D
N Patel and Justice C Hari
Shankar issued notice to the
RBI, ED and Paypal Payments
Private Limited and sought
their stand on the PIL before
the next date of hearing
scheduled on 18th September.

Abhijit Mishra, a financial
economist, has claimed in his
plea that Paypal is operating
as a payment and settlements system in blatant
violation of the Payments and
Settlements Systems Act. He
said, Paypal does not figure
in the list of authorized
payment system operators
published by RBI on 27th May
2019.

According to the PIL, filed
through advocate Payal Bahl,
PayPal’s services are being
used by various online travel,
clothing and food websites or
apps, including Yatra,
Makemytrip, Bookmyshow,
Dominos Pizza and Myntra

The petition has alleged that
PayPal was also operating as
a foreign exchange dealer in
contravention of the Foreign
Exchange Management Act
(FEMA)