HC orders Yes Bank to restore API services to WazirX

A vacation bench of justices Gautam Ankhad and Sandesh D Patil observed that denying the crypto platform access to banking facilities severely affects its functioning

MUMBAI: The Bombay High Court on Wednesday granted interim relief to cryptocurrency exchange WazirX, ordering Yes Bank to restore its application programming interface (API) facility and banking services within three days.

FILE PHOTO: A security guard stands outside a Yes Bank branch at its headquarters in Mumbai, India January 17, 2018. Picture taken January 17, 2018. REUTERS/Danish Siddiqui/File Photo (REUTERS)

A vacation bench of justices Gautam Ankhad and Sandesh D Patil observed that denying the crypto platform access to banking facilities severely affects its functioning.

Zanmai Labs Pvt Ltd, which operates WazirX, had approached the high court, challenging Yes Bank’s abrupt discontinuation of its API services on April 21. Senior advocate Mustafa Doctor, representing WazirX, informed the bench that the crypto platform processes large volumes of financial transactions through the bank’s API services in the ordinary course of its business. API services enable seamless fund transfers and settlements between the platform and its customers, it said.

According to the petition, Yes Bank sent WazirX an email on March 24 stating that its API facility would be discontinued from April 22 due to certain changes in its internal policy. Then, on April 16, the bank sent another email withdrawing the discontinuation notice.

WazirX then approached the banking ombudsman under the Reserve Bank of India for relief, but said it did not receive a response. Then, on May 12, Yes Bank also blocked the platform from manually accessing the payment application and online banking facilities required to operate its accounts, the petition claimed. WazirX was also prevented from accessing the funds lying in its bank accounts, the petition added.

Contending that Yes Bank’s abrupt action had brought its business operations to a complete standstill, WazirX urged the court to order the restoration of the API services and all ancillary banking facilities required to operate the crypto-exchange.

Advocate Niyomi Jariwala, representing Yes Bank, strenuously opposed the petition, contending that the API facility was a discretionary banking service that it extends. The bank said that the crypto platform cannot claim, as a matter of legal right, the continuation of such services and could avail similar services from any other bank. It added that manual banking facilities would be restored shortly, but not the API services, in view of an internal review undertaken in accordance with its policies and guidelines.

The court, however, noted that Yes Bank had abruptly discontinued the API services provided to WazirX despite withdrawing the discontinuation notice. The decision was based on “unspecified internal policies and guidelines without disclosing any particulars for the abrupt action,” the court said. It also noted that there was no response from the banking ombudsman.

Denying banking access and API services, and not addressing the petitioner’s complaint, is “likely to cause irreparable prejudice” to the petitioner, as the functioning of its business will get severely affected,” the judges said, while ordering restoration of the facilities as an interim measure.

The court has now posted the matter for further hearing on June 8.