Tamil Nadu petrol dealers threaten UPI ban over account freezes

The Story in Brief

Tamil Nadu petroleum dealers have threatened to stop accepting UPI and card payments after police froze their bank accounts during a cybercrime crackdown. The Tamil Nadu Petroleum Dealers Association (TNPDA) says dealers' accounts are being flagged as possible mule accounts due to routine digital transactions from unknown customers. Association president K. P. Murali called the actions disproportionate and said honest dealers are being treated as accused persons. The dealers have written to Chief Minister C. Joseph Vijay seeking relief. Similar protests occurred in Maharashtra earlier in 2025, where the Vidarbha Petroleum Dealers Association also threatened a payment boycott.

Dealers report that accounts are frozen on instructions from cybercrime authorities investigating disputed transactions, sometimes without dealers being told the specifics. The TNPDA says its 5,000 outlets process 200, 500 digital transactions daily, with digital payments now accounting for over half of revenue at some stations. The Ministry of Home Affairs had issued a standard operating procedure in January 2026 that requires verification with account holders before freezing and provides a grievance mechanism. The Cyberabad police have also reported using MuleHunter.AI, an RBI tool launched in December 2024 to detect mule accounts.