New Delhi: The Reserve Bank of India Wednesday told the Delhi High Court that a Public Interest Litigation (PIL) cannot be used as a weapon to challenge the financial or economic decisions taken by the government or the RBI.
The RBI made the submission in response to a PIL alleging that online payments platform Paytm was providing lending facilities in violation of the law regulating such activity.
The affidavit was filed before a bench of Chief Justice D N Patel and Justice C Hari Shankar which has listed the matter for further hearing on September 18.
The petition filed by Abhijit Mishra, a financial economist, claimed that Paytm Payments Bank Ltd's 'post paid' service was operating contrary to the existing law and guidelines regulating such entities.
It contended that RBI's guidelines for payments banks, like Paytm, do not permit credit or loan disbursement activities by such entities.
In its affidavit, RBI said that section 22 of the Banking Regulation Act empowers the RBI to issue banking licence to a company to carry on banking business in India, subject to certain conditions provided in this provision.
"Upon an application made in this behalf by respondent 2 (Paytm), a licence to carry on banking business in the style of a 'payments bank' has been issued by the RBI subject to certain conditions enumerated in the licence itself," it said.