Indian Banks Are Forcing Customers to Comply to Anti-Cryptocurrency Policy

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The cryptocurrency crackdown in India has taken an interesting turn. Following the regulatory measures from the Reserve Bank of India of prohibiting local banks from providing services to cryptocurrency businesses, some Indian banks have taken drastic measures to discourage cryptocurrency adoption.

According to reports, the banks are forcing customers to sign contracts stating that they “will not deal with any transactions related to cryptocurrency including bitcoins”, while signing up for an account. Furthermore, these new terms of service agreement are also applied to existing accounts as the banks are reportedly blocking accounts of their existing customers if they are found to have made crypto-related transactions.

The Agreement 

While the banking restrictions imposed by India’s central bank are still under contest in the apex court of the country, the major banks in the country have been asking their customers to declare that they will not deal with any cryptocurrency transactions.

Twitter user Indiancryptogirl, “@Desicryptohodlr,” tweeted a screenshot of Kotak Mahindra Bank’s account opening agreement on Tuesday. One of the items customers must agree to reads:

“I hereby declare that I will not deal with any transactions related to cryptocurrency including bitcoins. I also understand and agree that the bank reserves all right to close my account without further intimation in case I am found to undertake such transactions.”

Indian Banks now forcefully taking permission from us to ‘reserve right to close our account without further intimation’ if we deal in #cryptocurrency transactions

Ability to decide what to do with our own money is the very reason we need to invest, #BUIDL, & believe in #bitcoin pic.twitter.com/MpP34uqGKe

— Shalini? (@DesiCryptoHodlr) January 9, 2019

The official website of Kotak Mahindra Bank also reiterates their stance, it says that all of  its branches carry a notice stating that the bank has disallowed “credit, debit, or prepaid cards for purchasing or trading in bitcoins, cryptocurrencies, or virtual currencies.” The notice continues:

If the bank were to receive instructions from the authorities, it would have to close any account that transacts in virtual currencies, possibly without any intimation, and would not be able to provide assistance in case of any losses incurred due to such dealings.

A spokesperson for Indian exchange Instashift explained to news.Bitcoin.com that Kotak Mahindra Bank is “a non-nationalized private bank so they have to certainly adhere to all RBI regulations, else their banking license would be ceased.” He further elaborated that such banks need to be extremely cautious “about how their customers are using their system so that they don’t come under any RBI scrutiny in the future. 

Furthermore, the spokesperson added,  based on his experience that banks “are keeping an eye on everyone’s account and checking the remarks of a transaction.” The banks are “strictly adhering to the RBI directions and blocking accounts which they feel are being used to trade cryptocurrency,” customer accounts come “under scrutiny and the bank officers read the crypto keywords in remarks,” the accounts “would definitely get blocked.” Nonetheless, he emphasized:

But as per law, it’s the individual’s choice what to do with his hard earned money and the RBI has not banned cryptocurrency.

Also in Pakistan

@IAmCryptoLegend, another Twitter user commented in the Indiancryptogirl’s thread to say that that banks are implementing similar measures in Pakistan as well.

Same texts we received on our cells here in Pakistan ????

— SMansoorN (@IamCryptoLegend) January 9, 2019

Such news does present the Indian regulator in a negative light as far as cryptocurrency enthusiasts are concerned. However, a recent report from the RBI itself states that Cryptocurrencies are not a threat.  Well, only time will tell whether the ban over the Indian banks for cryptocurrency is lifted or not, for now, all the ecosystem is eyeing the upcoming hearing of the matter, and the subsequent decision of the country’s supreme court on the matter.

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