ICICI Bank asked to open up to PhonePe by NPCI

ICICI Bank had earlier cited concerns surrounding security for blocking transactions on PhonePe

Days after blocking transactions by its customers on Flipkart's PhonePe e-wallet, country's largest private sector lender ICICI Bank was today asked by NPCI to open up immediately.

"Based on a review by NPCI on ICICI Banks's action to block Unified Payments Interface (UPI) transactions made through PhonePe App, we would like to state that ICICI Bank has been advised to open UPI transactions immediately," it said in a statement.

The corporation, which runs the UPI platform that focuses on interoperability, had discussions with both ICICI Bank and YES Bank, which is the banker for PhonePe before arriving at the decision, it said.

"We have also advised banks to adhere to the merchant on-boarding guidelines meticulously from the angle of interoperability of merchant App so that such disputes are avoided," it added.

A reaction from ICICI Bank, which had initially cited concerns surrounding security for its action, was not immediately available.

Earlier media reports had quoted ICICI Bank as saying that PhonePe of "following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of interoperability and choice that empowers a customer to choose any app to make payments through UPI."

The reports had also said that ICICI Bank was not the first lender, which had blocked such applications, and said country's largest lender SBI had also blocked money transfers by its account holders to Paytm, Mobikwik and Freecharge.

Speaking earlier in the day, Yes Bank's managing director and chief executive Rana Kapoor had termed such behaviour is not "conducive" to the growth of the Unified Payments Interface (UPI) platform and advocated a need to collaborate.

Asserting the bank has cornered a 40 per cent market share on the UPI platform, Kapoor termed this as "blips" caused by "one or two banks".