Delhi HC seeks response from Centre, RBI, NPCI on PIL seeking comprehensive framework to curb UPI frauds

New Delhi [India], February 19 (ANI): The Delhi High Court has sought a response on a Public Interest Litigation (PIL) seeking the formulation of comprehensive guidelines and the creation of a strengthened regulatory and investigative framework to tackle the growing instances of fraud through the Unified Payments Interface (UPI).
A Division Bench comprising Chief Justice DK Upadhyaya and Justice Tejas Karia issued notice to the Union of India through the Ministry of Finance, the Reserve Bank of India (RBI), and the National Payments Corporation of India (NPCI).
The petition has been filed by Pankaj Nigam, a 61-year-old retired Central Government employee, through Advocates Nishchaya Nigam and C. Ankeeta Appanna. Advocate Nishchaya Nigam, Managing Partner at Macrus Legal Law Offices, appeared as both filing and arguing counsel.
The plea raises concerns regarding what it describes as serious gaps in the existing reporting, redressal and investigation mechanisms dealing with UPI-related financial frauds.
According to the petition, the petitioner himself fell victim to a UPI fraud on February 15, 2024, while searching for rental accommodation through property aggregation websites.
He was allegedly defrauded of Rs. 1,24,616. Despite filing a complaint on the National Cyber Crime Portal and furnishing complete details, the petitioner claims that neither the identity nor the bank account particulars of the alleged fraudster were disclosed to him, nor has any recovery been made to date.
The plea contends that his experience reflects a broader systemic failure in addressing digital payment fraud effectively.
The petition relies on data from the RBI Annual Report 2023-2024 and a parliamentary reply dated February 6, 2024, to highlight the steep rise in UPI-linked frauds.
It states that domestic payment fraud through UPI increased from Rs. 111 crore in FY 2020-21 to Rs. 573 crore in FY 2022-23, while overall digital frauds reportedly surged significantly in the financial year ending March 2024.
The petitioner asserts that fraudsters are increasingly deploying sophisticated techniques, including so-called "digital arrest" scams, misuse of artificial intelligence tools, spam collection requests, fake UPI QR codes and fraudulent investment schemes promising high returns.
The plea argues that although UPI has transformed India's digital payments ecosystem, the regulatory framework and investigative mechanisms have not kept pace with the growing scale and complexity of fraud.
It alleges that there is no single-window complaint system, forcing victims to approach multiple authorities such as the National Cyber Crime Helpline (1931), banks, payment service providers, telecom operators and local cyber police stations. This fragmented structure, the petition claims, delays prompt action and hampers timely recovery of funds.
The petition further questions the effectiveness of NPCI's existing UPI dispute redressal mechanism, stating that it categorises complaints under predefined heads but does not provide real-time access to crucial transaction details such as the recipient's bank account information. It also alleges a lack of transparent acknowledgement and tracking systems for complainants.
Additionally, the plea raises concerns about anonymity in peer-to-peer UPI transfers, contending that investigative agencies face procedural hurdles in obtaining transaction logs and account details, which in turn affects trial speed and conviction rates.
Among the reliefs sought, the petitioner has requested the Court to direct authorities to ensure that only fully KYC-compliant bank accounts are permitted to participate in UPI transactions.
The plea also seeks the creation of a dedicated integrated platform linking the National Cyber Crime Portal with UPI applications, banks, payment service providers and telecom operators to enable seamless and time-bound reporting of fraud. It further prays for mandatory preservation of detailed transaction records, including bank account numbers, account holder names, branch details, IFSC codes, metadata and IP logs, to facilitate investigation and prosecution.
The petitioner has additionally sought the formulation of guidelines to include UPI frauds below Rs. 10 lakh within the e-Zero FIR framework to enable automatic registration of FIRs in serious online financial crime cases. A direction for framing a comprehensive Standard Operating Procedure (SOP) beyond the Information Technology Act to deal with multi-jurisdictional UPI fraud cases has also been sought.
The plea states that the petitioner had earlier approached the Supreme Court under Article 32 of the Constitution. By an order dated May 5, 2025, the apex court directed the respondents to treat the writ petition as a representation. While NPCI reportedly responded to the representation, the Union of India and RBI allegedly did not respond, leading to the filing of the present writ petition under Article 226 before the Delhi High Court. (ANI)