Tamil Nadu petrol pumps threaten UPI boycott over cybercrime account freezes

Petrol pump operators in Tamil Nadu have threatened to cease accepting UPI and all other digital payments across the state, citing the freezing of their bank accounts. The dealers allege that the automated systems used in cybercrime investigations are incorrectly flagging their accounts as "mule accounts," leading to the disruption of their businesses.

The Tamil Nadu Petroleum Dealers Association (TNPDA), representing approximately 5,000 outlets, reported that hundreds of digital transactions are processed daily, with digital payments now constituting over half of the revenue at some stations. The association has appealed to the Chief Minister for intervention, as banks are reportedly freezing accounts based on instructions from cybercrime authorities investigating disputed transactions.

Members have described the actions as "disproportionate" and reported instances of dealers being detained for questioning without specific details of the transactions under investigation. This situation mirrors similar concerns raised by petrol pump owners in Maharashtra earlier this year, who also considered halting digital payments due to account freezes linked to cybercrime complaints.

While authorities are employing AI-driven tools like MuleHunter.AI to detect fraudulent mule accounts, the petrol pump dealers feel these systems are too sensitive and prone to errors. They argue that these incorrect freezes cause significant hardship and impede legitimate business operations, demanding clearer guidelines and a more accurate identification process.