The Delhi High Court on Thursday issued notice to Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), State Bank of India (SBI) and others on a petition seeking direction to respondents to take effective steps and take back the decision of prohibiting UPI Payments in the crypto-exchanges.
The plea alleged that the arbitrary action taken by the SBI to block the Unified Payment Interface (UPI) Services for the WazirX (leading cryptocurrency exchange) users violated 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 plea stated.
The bench of Justice DN Patel and Justice Jyoti Singh on Thursday sought responses from all the respondents and slated the matter for December 24, 2021. The court also appreciated the drafting of the petition by the advocates in the open court.
Plea seeking direction to the Reserve Bank of India to regulate and govern the cryptocurrency sector and thereby making provisions for the payment interfaces and decisions.
The petitioner Arnav Gulati, a law student through Advocate Siddharth Acharya and Advocate Simarjeet Singh Satia stated that "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."
The plea added that, in April 2018, RBI issued a circular prohibiting all the banks to deal with any virtual currency or provide services for facilitating any person or entity in dealing with or settling them including Bitcoins. Such services included 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.
"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," the plea further read.
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