Questioning the ‘shadow prohibition’ on cryptocurrencies, leading banks have asked the umbrella establishment National Payments Corporation from India (NPCI) to spell out in a formal directive the curbs on the use of the popular money transfer tool ‘Unified Payment Interface’ to trade the virtual digital assets (VDAs).
Several banks have hesitantly blocked UPI for the trading of cryptos following “verbal instructions” from NPCI which operates retail payments and settlement systems in the country.
The banks, some of which are investors of NPCI, raised the issue at a recent meeting after the payments body expressed its reservations half a few weeks ago on the fund flows through UPI for crypto trades, two people aware of the discussions in the meeting told ET.
UPI allows a bank account to send and receive money from their cell phones without the need to enter bank account data or net banking user ID and password.
A formal communique from NPCI, however, seems unlikely anytime soon. An NPCI official told ET that there are “no intentions of any circular”.