Union Finance Minister Arun Jaitley in a meeting with RBI deputy governor BP Kanungo, IT Secretary Ajay Prakash Sawhney, Economic Affairs Secretary Subhash Chandra Garg and Finance Services Secretary Rajiv Kumar discussed Data Localisation policy by the Reserve Bank of India for global financial technology companies.
The global companies have called for an extension of the October 15 deadline. In April, global payment companies were given 6 months to store transaction data of Indian customers within India to ensure better monitoring of payment service operators.
RBI said that it is important to have “unfettered supervisory access to data stored with these system providers as also with their service providers/ intermediaries/third party vendors and other entities in the payment ecosystem”.
RBI has asked all system providers to ensure that the entire data relating to payment systems operated by them are stored in a system only in India. The data should include the full end-to-end transaction details, information collected/carried/ processed as part of the message/payment instruction.
In support of data localisation, a Paytm spokesperson said, “We should be careful that we do not become mere internet colonies for global companies. Data localisation is important for national security and it is sad that we are seeing active lobbying for it to be scrapped as it would harm the economic interests of these global organisations.” Alibaba, one of the major investors in Paytm, has also supported RBI’s move.
PhonePe, the Flipkart-owned company, said it will make the Indian payment ecosystem resilient and will ensure better judicial oversight.
Domestic companies are hoping that this will create a level-playing field for all companies in terms of taxation as well as treatment.
Global corporations are seeking permission to mirror the data. Paytm said, “With data localisation, these companies are worried that the monetisation potential through the data generated reduces drastically and they also become more accountable in our country.”
Law enforcement agencies have also backed the data localisation policy of RBI. This will make it easier for them to track online transactions and social media interactions involving wrongdoing of any kind.