Tamil Nadu fuel retailers threaten to halt digital payments over account freezes

CHENNAI:

Petrol pump operators in Tamil Nadu are threatening to stop accepting UPI and other digital wallet payments across the state, citing a growing risk of arbitrary bank account freezes and police action arising from disputed transactions linked to cybercrime investigations.

TNPDA president KP Murali, who wrote a letter to Chief Minister C Joseph Vijay, said dealers were being treated as suspects in cybercrime cases despite having no means of verifying the identity or source of funds of customers who pay digitally. The association's roughly 5,000-odd outlets across Tamil Nadu process between 200 and 500 digital transactions a day on average, with digital payments now accounting for more than half of revenue at some stations, according to the letter.

Murali said banks were placing liens on dealers' accounts, and in some cases freezing entire operating accounts, on instructions from cyber-crime authorities investigating disputed transactions — actions he called disproportionate to the underlying disputes. He also cited cases of dealers being picked up during early morning hours and held for questioning without being told the specifics of the transaction under investigation.

The dealers took up digital payments at the urging of public-sector oil marketing companies (OMCs) after demonetisation, in line with the central government's push toward a cashless economy, he said. Platforms cited include Google Pay, PhonePe and Paytm.

TNPDA is not opposing cybercrime investigations, Murali said, but is asking the state government to require police and cyber-crime units to give dealers written details of disputed transactions and communicate formally before taking coercive action; to confine any lien or account freeze to the disputed amount rather than the full operating account; and to issue directives against detaining dealers absent evidence of direct wrongdoing. The association has also asked for a standard operating procedure for handling disputed digital transactions at fuel retail outlets, and has requested a meeting with the Chief Minister's office.