Delhi High Court Stays Order Of Rs. 96 lakh Penalty Imposed By Financial Intelligence Unit To PAYPAL, Notice Issued To RBI

The Delhi High Court stayed a Financial Intelligence Unit order imposing a penalty of Rs 96 lakh on payment service PayPal (PayPal Payments Pvt Ltd v. Financial Intelligence Unit). The stay is subject to PayPal depositing a bank guarantee of the penalty amount with the High Court and maintaining records of all its transactions.The order was passed by a Single Judge Bench of Justice Prathiba M Singh in PayPal’s challenge to the penalty imposed on it. While issuing notice in the matter, the Court sought a response from the Financial Intelligence Unit, which is India’s central agency responsible for processing information relating to suspect financial transactions, under the aegis of the Union Ministry of Finance. The penalty was imposed on PayPal for not registering itself as a “reporting entity” under the Prevention of Money Laundering Act (PMLA), 2002.