Delhi High Court upheld penalty on PayPal

The High Court of Delhi maintained a penalty issued by the Indian finance ministry against PayPal India over non-compliance with the Prevention of Money Laundering Act (PMLA). PayPal filed a case against the ministry’s penalty alleging it is a payment intermediary and not a payment system operator. The ministry insisted that there is ample evidence PayPal is a payment system operator and shall therefore register itself accordingly, which PayPal failed to do for several years. The court also issued the Reserve Bank of India and the Finance Ministry an order to constitute a committee to clarify in which circumstances entities like PayPal must be considered as payment system operators under the PMLA.