Banks Suspending Crypto Services
Despite the Reserve Bank of India (RBI) informing the banks that the banning circular is no longer relevant, some Indian banks have allegedly suspended services to customers trading in cryptocurrency. IDFC Bank is the latest bank to join the list.
Livement Cites IDFC
Citing industry sources, Livemint reported last week that IDFC Bank had halted services to all crypto companies. The publication conveyed:
“IDFC First Bank over the past week temporality stopped services, as it is doing enhanced due diligence regarding banking support to crypto exchanges.”
Banks Avoiding Crypto
Last month, the RBI reiterated that banks and other regulated businesses should not cite its April 2018 rule. The rule prohibited banks from engaging in virtual currency transactions. The directive is no longer valid since the Supreme Court of India overturned it in 2020. Banks may “continue to carry out customer due to diligence processes” per existing laws, according to RBI.
Big institutions, such as ICICI Bank, Yes Bank, and Paytm Payments Bank have avoided working with cryptocurrency consumers.
Word Of Caution Issued
Due to the wild nature of cryptocurrencies, HDFC Bank and State Bank of India warned their customers about the hazards of trading in them. On the other hand, there is no ban for Bitcoin and other cryptocurrencies in India as per the government and the Reserve Bank of India.
Customers are in the middle of confusion as a result of such actions. The banks create choices behind closed doors, with little transparency or direct contact to inform customers of the changes.
Re-examining The Crypto Bill
The Indian government is still diligent on a cryptocurrency bill. It was intended to be introduced during parliament’s budget session, but it wasn’t. According to sources, an expert group is formed to re-examine the proposals in the present law. The present law seeks to ban all cryptocurrencies save those issued by the Reserve Bank of India.
Since then, the crypto sector has been completely unregulated, making it difficult for regulated financial players to predict the final result.