- 1 June 2021
- Posted by: btcbros12
- Categories: Articles, Banking, Bitcoin, Blockchain, Cryptocurrency, Future Finance, News, Regulation
India’s tussle with cryptocurrencies continues as certain national banks have started mailing users suspected of dealing in crypto assets, warning them of account closure. Most notably, HDFC bank, a large private player in India, has begun questioning users about their virtual asset transactions, citing a Reserve Bank of India directive from 2018. While this directive has been overturned by the Supreme Court in a March 2020 ruling, RBI has been unofficially urging banks to stop dealing with crypto exchanges and other crypto vendors since then.
Another organization, SBI Cards & Payment Services, has reportedly also followed suit. According to screenshots submitted by several users on Twitter, all these emails follow a similar pattern. They start by citing an obsolete directive, following which they give the consumer a 30-day time window to visit their nearest branch in order to disclose their crypto holdings and clarify the nature of the transactions. Finally, as a warning, the banks declare that they would be forced to restrict transactions on the said account if they do not hear back from the user.
It is important to note that India does not have any clear directives on individual consumers dealing with cryptocurrencies. While there has been talk of introducing a bill banning cryptocurrencies within the land, nothing to that effect has been discussed in the Lok Sabha yet. Moreover, earlier in May, the National Payments Corporation of India (NPCI) declared that they would not be officially restricting the flow of money intended for buying cryptocurrencies on their United Payments Interface (UPI) platform. UPI is the de-facto mode for online money transactions in India.
In light of all this, many users have tagged these banks in their posts citing harassment. A number of credit card holders have said that they received these emails without even using their cards for any crypto-related transactions. Others, who have received phone calls from their banks, reported that the executive on the other end flat-out declared that crypto investments were illegal. On being asked to clarify the same in writing, there was no further communication.
This slew of shady warnings comes at a time when several large private banks in India such as ICICI Bank, IndusInd Bank, Yes Bank, and HDFC Bank, among others, have cut off ties with cryptocurrency exchanges and institutions at RBI’s behest. Executives have been reported saying that no one wants to disobey RBI’s orders even though the talks with the central regulatory body have been informal.
On a related note, the Indian Government has been looking into forming a team of experts to study cryptocurrencies and regulating their transactions within the country. In March, Indian Finance Minister, Nirmala Sitharam, said in a TV interview that the government does not wish to ban blockchain development in the country as the Centre believes in the potential of the technology. However, nothing was said explicitly about the banning of cryptocurrencies.
- HDFC Bank, SBI Card Warn Customers Of Restrictions If They Deal In Cryptocurrencies https://www.bloombergquint.com/crypto/hdfc-bank-sbi-card-warn-customers-of-restrictions-if-they-deal-in-cryptocurrencies
- Exclusive: India may set up new panel to study crypto regulations https://economictimes.indiatimes.com/tech/technology/govt-may-set-up-new-panel-to-study-crypto-regulations/articleshow/82746324.cms
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