A Public Interest Litigation (PIL) has been filed against the Paytm Payments Bank for operating a post paid credit facility allegedly in contravention of law which regulates such facility.
In response to the PIL, the bench, headed by Chief Justice Rajendra Menon and Justice Brijesh Sethi, has issued a notice to the Reserve Bank of India (RBI) and Paytm Payments Banks Limited (PPBL) asking them to clear their stand on the matter. The next date of hearing is on September 3, as per an agency report.
The petition has been filed by financial economist Abhijit Mishra. He has alleged that Paytm Payments Bank Limited is operating post paid wallets in defiance of Operating Guidelines for Payments and Guidelines for Licensing of Payments Banks as issued by the Reserve Bank of India.
The guidelines do not permit lending facilities to customers by such entities without prior approval of the Central bank, he contended.
Paytm ‘Post Paid’ is a credit facility being offered by the company to its customers. As part of this service, customers can recharge mobiles, book movie and travel tickets and also shop on Paytm and pay the following month at zero cost or interest. The facility is being offered to customers subject to verification of their creditworthiness as per the company’s assessment. It is therefore open only for “eligible” customers.
The PIL further seeks punitive action by the RBI against the directors, management and officers of the PPB for malpractice and violation of relevant banking acts.
It also claimed that Paytm Bank by the means of its post paid service has provided un-monitored and unauthorized access to the personal information such as Aadhaar, PAN, transactions etc. of its customers to unauthorized third party, thereby clearly violating Article 21 of the Indian Constitution and other relevant banking acts.