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The Delhi High Court bench of Chief Justice D N Patel and Justice Jyoti Singh on Thursday sought the response of the Reserve Bank of India and State Bank of India on a plea seeking to direct the authorities to revoke the prohibition on the use of UPI platform in dealing and settling funds in the cryptocurrency exchange, WazirX.

The plea filed by law student Arnav Gulati, alleges that the arbitrary action taken by the SBI to block the Unified Payment Interface (UPI) Services for the WazirX users violated the Supreme Court Judgment of Internet And Mobile Association vs Reserve Bank Of India. 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 plea said 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, it said, adding that thereafter, all the transactions related to cryptocurrencies via banking institutions were stopped.

The plea further read that “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.”

However, on September 15, SBI prohibited the use of the UPI platform for its account holders in the WazirX cryptocurrency exchange which has now been challenged.

The matter has been posted for further hearing on December 24th 2021.

Arnav Gulati v. SBI & Ors.