Law student Arnav Gulati filed a Public Interest Litigation through Advocate Siddharth Acharya to challenge the decision of the State Bank of India to prohibit UPI payments on cryptocurrency platforms, wherein the petition sought to allow UPI payments on the cryptocurrency platform WazirX.
The petitioner contended that the platform is used by approximately 1 crore Indians, wherein the platform allows a user to use either bank transfer or net banking or money wallets or UPI payments to make deposits on the WazirX platform to deal in cryptocurrencies. The petitioner held that the payment options other than UPI not only take more time to go through but also charge extra fees as convenience charges, including GST. The petitioner submitted the convenience of UPI payments over other modes of payments over WazirX owing to the seamless fund routing of the former through mobile devices round the clock 24×7, 365 days of the year. The petition iterated that the absence of UPI payments in the platform will unnecessarily impede the users from either trading or investing in cryptocurrency in a timely fashion; consequently, the petitioner held that bar of State Bank of India over UPI payments on cryptocurrency exchanges will cause unprecedented losses to prospective investors.
The petitioner argued that the decision of the bank goes against the directions of the Reserve Bank of India in May 2021 to permit banks to trade in cryptocurrencies and other virtual currencies in adherence to the Supreme Court judgement on March 04, 2020, in the judgement of Internet and Mobile Association of India v. Reserve Bank of India, CWP. No. 528/ 2018 (allowing banking entities to conduct transactions in virtual currencies). The Reserve Bank of India had asked the banking entities to adopt diligence methods and standard protection procedures to allow seamless transactions with the banks using virtual currencies. The petition held that the decision of the State Bank of India violates the aforementioned directions.
A two-judge bench of the Delhi High Court of Justice D. N. Patel and Justice Jyoti Singh issued a notice to the Reserve Bank of India, the State Bank of India, the National Payments Corporation of India and the Department of Financial Services, to seek a response from them regarding the petition on or before December 24, 2021.