Category Archives: Cyber Law Due Diligence In India

The Banking, Financial And Regulatory Environment In India

E-commerce in India is flourishing and many business houses and companies are investing in various forms of e-commerce commercial activities in India. However, a majority of e-commerce payments are still made in an offline manner. The cash on delivery may harm e-commerce in India in the long run. A shift toward online payments is not only desirable but is also inevitable. In fact, an integrated modern banking law for India is in pipeline that may strengthen online payments making in India.

So what is the present techno legal banking, financial and regulatory environment prevailing in India? Perry4Law and Perry4Law Techno Legal Base (PTLB) have compiled a list of their important research works pertaining to banking and financial environment existing in India. The following articles are worth considering in this regard:

(1) Internet Banking Guidelines in India by RBI

(2) National Telecom Policy 2012 of India by TRAI

(3) Compounding Authority Procedure under Indian FEMA Act 1999

(4) Procedure for Compounding of Contraventions under Indian FEMA, 1999

(5) RBI Delegates Compounding Powers under FEMA to Its Regional Offices

(6) Compounding Of Contraventions under FEMA, 1999

(7) Banking Related Mergers and Acquisitions (M&As) in India

(8) Banks in India Are Not Providing Positive Confirmations of NEFT Transactions

(9) National Electronic Funds Transfer (NEFT) System of India: RBI Guidelines

(10) Mobile Banking Transactions in India – Operative Guidelines for Banks by RBI

(11) Enhanced Due Diligence Measures by Banks of India for Higher Risk Customers

(12) ECB for MFIs and NGOs Engaged In Micro Finance Activities under Automatic Route in India

(13) MFIs In India Allowed To Raise ECBs Up To USD 10 Million

(14) SEBI Contemplating Electronic Initial Public Offer (E-IPO) In India

(15) SEBI Guidelines on Outsourcing of Activities by Intermediaries

(16) RBI: Indian Banks’ Investments in Non Subsidiary and Non Financial Services Companies

(17) Risk Management and Inter Bank Dealings in India

When the e-commerce activities would increase in India, online payment would be the preferred mode of payment by online consumers and customers. This is the reason why companies like PayPal are planning to enter Chinese and Indian online payment markets.

Similarly, with a growing emphasis upon electronic delivery of services in India by Indian government, online payment market of India becomes a good place to make huge profits.

However, both e-commerce players and online payment players are required to ensure cyber law due diligence in India. The cyber law due diligence for Indian companies is very stringent and there is no reason to take it lightly. In fact, cyber due diligence for foreign and Indian websites in India is an issue that is frequently agitated before Indian courts. Further, legal requirements of undertaking e-commerce in India must also be strictly followed.

Perry4Law and PTLB hope this compilation of research works pertaining to banking, financial and regulatory environment existing in India would be helpful to all concerned. We wish all the best to all e-commerce and online payment handling companies and institutions.

E-Health In India Is Suffering From Legal Roadblocks

Electronic commerce (e-commerce) has finally been accepted as a viable business model in India. This is despite many shortcomings that are mostly legal and technological in nature. On the legal side, we have no dedicated e-commerce laws and regulations in India. On the technological side we are still looking forward to wider broadband penetration and technology awareness.

However, there is an aspect that may e-commerce enthusiastics in India have failed to understand. Online dealings give rise to many civil and criminal sanctions if not properly undertaken. For instance, if cyber law due diligence in India is not undertaken by e-commerce websites they may be held civilly and criminally liable for act or omissions on their part.

Similarly, e-commerce websites and platforms are Internet intermediaries who may have to comply with not only laws of India but also laws of other jurisdictions. In order to enjoy the protection of safe harbour in India, e-commerce websites must comply with Information Technology (Intermediaries Guidelines) Rules 2011 of India.

Of all e-commerce fields, e-health in India is most delicate and difficult to establish. For instance, individuals and companies are shying away from selling prescribed medicines and drugs online. All the e-commerce players in e-health field are doing are selling healthcare and cosmetics through e-commerce websites.

E-health players in India cannot be blamed for this position. The Indian government has not made conducive environment for e-health in India. Since the legal risks of e-health in India are tremendous, e-health players are not opening online drugs and medicines stores in India.

When technology is used for medical purposes, it gives rise to medico legal and techno legal issues. In United States, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine.

On the contrary, we have no dedicated e-health and telemedicine laws in India. Even essential attributes of these laws like privacy protection, data protection, data security, cyber security, confidentiality maintenance, etc are not governed by much needed dedicated laws.

E-health and telemedicine are very important part of health policy of India. However, legal enablement of e-health has not taken place in India. It is high time for Indian government in general and health ministry of India in particular to ensure legal enablement of e-health in India.

E-Commerce Regulations And Laws In India

Electronic commerce is an area whose legal formalities cannot be taken lightly. Electronic commerce involves multiple jurisdictions and at times multiple laws of different countries are applicable to a single electronic commerce website.

Further, the landscape for electronic commerce dispute resolution in India is also fast changing. With more and more stress upon online disputes resolution (ODR) in India electronic commerce disputants now prefer ODR as a mechanism for dispute resolution. Corporate disputes resolution through ODR in India is also being explored. E-courts and ODR have also added their own valued to electronic commerce and corporate dispute resolutions in India.

Electronic commerce in India is witnessing a good growth due to progressive policies and liberal foreign direct investments (FDIs). E-commerce uses information and communication technology (ICT) to operate. Although many technological aspects are also taken care of by an e-commerce platform, yet establishment and running of an e-commerce website is the most important requirement.

Internet is boundary less and a website hosted in a particular country can be accessed from any part of the world. Further, there may be cases where a websites located in a particular country may attract legal jurisdictions of multiple countries. Thus, compliance with the laws of the principal country as well as those countries where such e-commerce websites targets audience and customers is of prime importance.

There have been instances where e-commerce websites located in India failed to observe cyber law due diligence in India and e-commerce regulations and laws in India. Criminal trials and criminal liabilities have been imposed by Indian legal system upon such websites. The case and the criminal and civil trials against companies like Google, Yahoo, Facebook, Microsoft, etc are few examples of the same. Such cases against e-commerce websites and foreign companies would further increase and e-commerce players must appoint nodal officers in India to comply with Indian laws.

Thus, not only legal requirements for undertaking e-commerce in India are stringent but even Internet intermediaries liability in India must be taken seriously by companies engaged in online transactions and businesses. We have no dedicated e-commerce laws in India but the information technology act 2000 (IT Act 2000) covers basic level e-commerce legal framework in India. The IT Act 2000 also prescribes cyber due diligence for foreign websites in India.

E-commerce due diligence in India is a much needed requirement that all e-commerce players, whether Indians or foreign, must undertake as soon as possible. Non observation of local and foreign laws can tarnish the image and brand of a company that cannot be regained again. It is better to err on the side of precaution rather than caught on the wrong side of the law.

E-Commerce Dispute Resolution In India

Electronic commerce brings both comforts and discomforts to its users. The comforts include on the spot sales and purchase, competitive costs, convenience, saving of time, etc. The discomforts include frauds and cyber crimes committed against e-commerce users. At times there are disagreements and dissatisfactions as well among buyers and purchasers that cannot be resolved using traditional litigation methods.

This is the reason why we need alternative dispute resolution (ADR) mechanism to resolve e-commerce disputes in India. E-commerce regulations and laws in India are limited in nature and this does not allow use of ADR mechanisms and technology driven solutions. For instance, while European Union and other nations are increasingly using online dispute resolution (ODR) for resolving many aspects of e-commerce disputes yet online dispute resolution (ODR) in India is still not known.

Similarly, establishment of e-courts in India can also facilitate early and effective e-commerce disputes resolutions in India. However, till February 2012 we are still waiting for the establishment of first e-court in India. E-courts and ODR in India are urgently required to reduce backlog of cases and for reducing increasing pressure upon traditional courts. E-courts and ODR can also help in e-commerce disputes resolutions in India.

Some of the areas where we must pay special attention include technology related dispute resolution in India, film, media and entertainment industry dispute resolution in India, cross border e-commerce dispute resolution in India, etc. E-courts and ODR can be effectively used for all the abovementioned purposes.

E-commerce players in India have many techno legal obligations to follow and cyber law due diligence in India is one such obligation. Not only legal requirements for undertaking e-commerce in India are stringent but even Internet intermediaries liability in India must be taken seriously by companies engaged in online transactions and businesses.

Realising that cyberspace can bring many commercial benefits; both individuals and companies are ensuring that they have strong online presence. More and more brand promotion and protection in India are done these days in an online environment. Companies and individuals are also ensuring domain name protection in India so that their reputation and goodwill is not misappropriated by others. Brand protection, reputation management and domain name cyber squatting disputes are at rise and the same can be resolved using e-courts and ODR in India.

However, there is a general lack of awareness regarding use of e-courts and ODR for e-commerce disputes resolution. Further, there are very few e-commerce lawyers and law firms in India that can provide expert services in this regard. E-commerce players must also be aware that other laws, including intellectual property laws, can make these e-commerce players labile for civil and criminal actions. For instance, these e-commerce players can be held liable for online infringement of copyright in India of the copyright owners. Similarly, if any person posts an offending material at the e-commerce site or otherwise deal with the e-commerce site in an illegal manner, the e-commerce site owner may find himself in trouble.

Perry4Law and Perry4Law Techno Legal Base (PTLB) strongly recommend that before opening an e-commerce website or business, the owner of the same must consult a good techno legal law firm that can advice him upon all the possible and applicable aspect of e-commerce laws in India. Further, Perry4Law and PTLB also recommend active use of e-courts and ODR in India for resolving e-commerce disputes resolutions in India and corporate disputes in India.

We also believe that more effective and useful e-commerce laws in India must be formulated that expressly deal with e-commerce aspects in India. Let us hope that these suggestions would be implemented by Indian government very soon.

Google And Facebook To Remove Offending Contents Within 15 Days

Companies like Google, Facebook, etc are facing civil and criminal trials in India. In fact, representative of these companies have been asked to personally appear before a criminal court on 13th March 2012. Today a civil court has given 15 more days to companies like Google, Facebook, etc remove objectionable contents form their websites.

The entire issue revolves around Internet intermediaries’ liability in India. Companies like Google, Facebook, etc are Internet intermediaries as per the provisions of Information Technology Act 2000 (IT Act 2000). The IT Act 2000 is the cyber law of India that covers dealings of these companies in cyberspace. If these companies fails to ensure cyber law due diligence in India, they are liable to be prosecuted in India.

Cyber due diligence for companies in India has been ignored for long. However, companies and individuals are now facing legal challenges for ignoring the same. There are certain simple procedures that can be adopted to ensure compliance with Indian laws.

For instance, foreign companies and websites must appoint nodal officers to comply with Indian laws. Similarly, these companies and websites must also formulate an India specific legal strategy to tackle cyber law and intellectual property violation issues more properly.

Perry4Law and Perry4Law Techno Legal Base (PTLB) believe that these companies must ensure compliance with Indian laws in true letter and spirit. The Information Technology (Intermediaries Guidelines) Rules, 2011 of India must be specially taken care of by all Internet intermediaries of India.

Companies like Twitter and Google have already taken initiatives to comply with Indian laws. Twitter has put in place a country specific mechanism to remove offending tweets. Google has also started redirecting Indian bloggers to *** domains instead of *** domain. This method would allow Google to remove offending contents pertaining to *** alone once a valid legal request is made from Indian government or individuals residing in India.

Presently, civil and criminal cases are pending against companies like Google, Facebook, etc before various courts in New Delhi. Before the Delhi High Court, the respondent/complainant of the criminal complaint has placed it final arguments on 02-02-2012 and the petitioner companies would put its final arguments on 14-02-2012.

The civil court of New Delhi would analyse the compliance report of Google, Facebook, etc on 01-03-2012. The 22 firms involved in the case have to submit in writing that they have deleted the content before the next hearing. The criminal trial’s hearing is scheduled on 13th March 2012 where representatives of foreign companies have to be personally present. It seems foreign companies would have a busy month ahead.

India Must Invent Alternatives Of DMCA Complaint To Google And Others

Of late foreign companies and websites like Google, Facebook, etc are increasingly finding themselves in the legal net of India. In fact, a criminal case is already pending against Google, Facebook, etc for failure to exercise cyber law due diligence.If websites like Google, Facebook, etc fail to exercise cyber law due diligence as per the requirements of Indian information technology act, 2000 (

Corruption And Technology Related Due Diligences In India

The recent spate of corruption related disclosures in India has sent a strong message to Indian and foreign companies to ensure that their business are strictly in compliance with Indian and foreign laws. Naturally, companies that have entered into merger and acquisitions (M&A) in the past are now looking forward to ensure that nothing fishy happened during such M & A transactions.These Indian

Social Media Websites Investigation In India

Social media websites have become ubiquitous these days. Ask any Internet using person or organisations and he/it would tell you about usage of some form of social media websites. Social media is not only helpful in projecting own policies, thoughts and ideas but is also helpful in exploring new ventures and partnerships.However, abuses of social media are also rampant. Social media is

Electronic Legal Due Diligence In India

Legal due diligence in India is not a new concept. Legal due diligence involves assessing the suitability, efficiency and viability of a company or organisation. Legal due diligence may be required to meet statutory and regulatory requirements or it may be necessary when a company wishes to invest in another company.A contemporary form of legal due diligence, especially for companies and

Cyber Due Diligence For Indian Companies

Cyber due diligence in India has finally arrived in India. The information technology act, 2000 (IT Act 2000) is the sole cyber law of India. IT Act 2000 prescribes cyber due diligence requirements on the part of various stakeholders like banks, companies, individuals, Internet intermediaries, e-commerce sites, etc.However, till now cyber due diligence in India has not been taken seriously. This

Cyber Security Laws, Lawyers And Law Firms

Techno legal fields like cyber law, cyber security, cyber forensics, cyber warfare, cyber terrorism, etc were never considered to be a cup of tea for lawyers and law firms. This may be due to many factors like lack of knowledge, absence of suitable cyber security laws, non remunerative nature of techno legal issues, etc.

One positive development that I have recently noted about these techno