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State Bank of India blocked crypto exchange fund transfers using its UPI platform
Sep, 20 2021
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Photo by Manojkumar wikipedia user Creative Commons
According to sources in
the payment industry, the State Bank of India (SBI), India's largest lender,
has barred digital currency exchanges from using its Unified Payments Interface
(UPI) platform.
Payment processors have
been instructed to stop providing services to cryptocurrency merchants using
the bank's UPI. The Economic Times reported on Wednesday that SBI has “blocked
the receipt of funds by crypto bourses on its UPI platform.”
"It is the policy of
the bank not to comment upon matters relating to the subject matter," said
an SBI spokesperson.
The Indian National
Payments Corporation (NPCI) created the UPI to facilitate instant real-time
interbank transactions using mobile phones. UPI is supervised and regulated by
the Reserve Bank of India (RBI).
The decision by SBI
follows several banks that have imposed similar bans on crypto-monetary
transactions in the previous months. In May, HDFC Bank alerted investors
against the usage of virtual currencies and was also advised that failure to
follow the rules could result in transaction limits or even canceling their
cards.
Several Indian banking
institutions have limited financial transactions to cryptocurrency exchanges.
Crypto traders are now increasingly using e-wallet services to continue
transacting on crypto trading platforms, even with wallet fees and fund
transfer limits.
"We're trying to
discuss and put forward our points to SBI. WazirX follows KYC (know your
customer) norms and AML (anti-money laundering) policies. Being the largest
crypto exchange in India, millions of Indians are currently affected due to
this move by SBI," said Nischal Shetty, Founder and CEO of Indian
cryptocurrency exchange, Wazir X.
The NPCI has announced in
May that UPI payments to crypto firms will not be banned. Instead, it advised
banks to make their own decisions regarding digital currency transactions.
As a result of the
decision made by SBI, many more banks can use their own UPI platforms to
restrict crypto-transaction.
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Pavan A
CBW - External Analyst
INDIA
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