Indian Banks Demand Action After NPCI Denies UPI Payments

The National Payments Corporation of India (NPCI) was approached by Indian banks seeking clarification for crypto transactions using the United Payment Interface (UPI).

This issue directly follows the Coinbase debacle where the NPCI denied any knowledge about partnering with any crypto exchanges.

With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI.

Despite these setbacks, banks want to continue conducting these transactions, still waiting on the national organization to help provide them with an alternative solution.

Indian banks have been seeking the National Payments Corporation of India (NPCI), which controls all national digital payment and settlement systems. They demand a clear set of instructions on using the Unified Payment Interface (UPI) for crypto transactions.

According to a report, several banks have raised the issue with UPI. Some of the ones that raised complaints are NPCI’s shareholders, including financial institutions like the State Bank of India, Union Bank of India, HDFC Bank, HSBC Limited, and Citi.

Banks are hopeful that these discussions with the entity will result in yielding official guidance on this particular issue. But an NPCI representative claimed that the NPCI is reluctant to launch any circular anytime soon.

The NPCI spokesperson claimed that

If a formal circular is released to ban UPI for cryptos or VDAs, the crypto industry will legally contest it, as they previously did with the Reserve Bank of India ban in April 2018.