Delhi High Court issues notice to authorities over ban on UPI payments for crypto trades

The Delhi High Court on Thursday issued notices to the Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), State Bank of India (SBI) and others regarding a petition seeking direction to respondents to initiate necessary measures and take back the decision of prohibiting UPI Payments in cryptocurrency exchanges. As per the petition, SBI’s action to block the UPI Services for the WazirX users was a direct violation of the Supreme Court Judgment of Internet and Mobile Association vs Reserve Bank Of India on March 4, 2020, RBI circular dated May 31, 2021, and other notifications by NPCI, which clearly stated that NPCI would not ban the cryptocurrency transactions.

The bench of Justice DN Patel and Justice Jyoti Singh has demanded a response from all the mentioned authorities and has posted the matter for December 24, 2021. The plea also seeks new guidelines from the RBI to regulate and govern the cryptocurrency as its popularity is increasing among Indians constantly. The petitioner Arnav Gulati who is a law student stated, "The SBI has blocked and restricted the users and merchants to use the UPI deposits option on the crypto exchanges thereby leaving the users with no option but to use the other payment deposit options which takes more time to get completed and extra charges like convenience fees, GST charges or service charges are charged, which makes it difficult for the retail investors and users to get the funds on time."

RBI and Supreme Court’s differing stand on cryptocurrencies  

Gulati further said in the plea that in April 2018, the RBI banned all banks from dealing with any cryptocurrency or providing services for facilitating the trade of cryptocurrencies including Bitcoins. The services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/ sale of virtual currencies. He also added, "And in March 2020, Supreme Court in the case of Internet and Mobile Association of India vs Reserve Bank of India passed the final order stating that RBI must allow the banking entities to allow the utilisation of their funds in dealing with Virtual Currencies and struck down the impugned circular. And in May 2021, the National Payments Corporation of India (NCPI) clarifies that it shall not ban the UPI transfer system for dealing with Cryptocurrency exchanges.”

(With ANI inputs)

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