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ARTICLE · 08 AUGUST 2018

Here's Why Cash On Delivery Is Not Illegal In India

Several sections of media reported this week that the ‘Cash on Delivery' model made popular by ecommerce players in India is illegal.

IndiaTechnology

Several sections of media reported this week that the 'Cash on Delivery' model made popular by ecommerce players in India is illegal. They did so on the basis of the Reserve Bank of India's (RBI) reply to a Right to Information (RTI) application filed by Mr. Dharmendra Kumar of India FDI Watch.

But a close analysis of the RBI's RTI reply and the relevant legal provisions reveals that the Cash on Delivery model is not illegal, and that the RBI has not said so either.

It's true that the Payment and Settlement Systems Act, 2007 (PSS Act) requires RBI authorisation for certain classes of activities, but it also provides an important exception which is relevant in the Cash on Delivery context.

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