Two Major Banks in India, Digibank and Kotak, Close Customer Accounts for Bitcoin Associations
India’s crypto industry is having a hard time since 2018. You have probably heard all about it. Last year, the Reserve Bank of India (RBI) has banned all banks from offering accounts to crypto companies in which was known as the Indian Crypto Ban in the industry.
However, things, which looked like they could be better for some time, took a turn for the worst recently as customer accounts were started to be frozen and shut down because their owners were dealing in cryptos. IndiaBits has talked about it on Twitter.
🚧 After India's Kotak Mahindra Bank, Digibank also starts freezing customer bank accounts for dealing in crypto! pic.twitter.com/KtBj0yH3IV
— IndiaBits (@indiabits21) January 15, 2019
The Kotak Mahindra Bank Case
The first one of the two cases happened with a customer account in the Kotak Mahindra Bank, an important bank based in India. This major retail bank has recently issued a notice of termination of account to one of its account holders.
Kotak Mahindra Bank has affirmed that they noticed that people were making transactions involving cryptos and that this would lead to the termination of the account in 30 days. Prints of the email were leaked to the internet, which caused an uproar to the crypto community in India.
The bank has affirmed that it would terminate any accounts if the owners used crypto and failed to go to the bank. A Twitter user called Indian Crypto Girl has affirmed that this is the reason why people need to invest in Bitcoin, so they can have more control over how they spend their money, as the banks are trying to meddle with it.
Also, now you have to read a message that affirms that you cannot invest in cryptos using the bank account in order to create an account in the bank, which is one of the largest Indian banks. Either you agree with the law or you cannot use banking services.
According to the bank, they are doing this to be compliant with the decision taken by the Reserve Bank of India last year.
The Digibank Case
Unfortunately, the Kotak Mahindra Bank is not alone. Another bank has joined it, the Digibank of India. The international bank has also frozen the accounts of its members that used them to buy Bitcoin.
Now, to create an account there, you have to agree not to use cryptos of any kind ever. Ironically, the email that talks about the account being frozen thanks to the user for choosing Digibank, “a revolutionary way to bank”. So much for a revolution, huh?
With two banks already doing it, it seems like the trend of clear. Now banks have decided that the Crypto Ban also extends to people and that people from India are no longer allowed to use virtual currencies.
The Bleak Future
The truth is that these are awful news for crypto investors all over India. If the trend actually catches up, people will start to lose their accounts for using cryptos, which can be another hard hit for cryptos in India.
As the country is already in a very bad situation, this can curb the usage of cryptos even more and affect the industry in a very negative way. Surely, some people will continue to use cryptos but it should be noted that this will make many of them afraid of losing their accounts.
If the government and the RBI shift their position soon, there is still time to save the crypto industry in India, but the situation only looks worse as time passes.
Many startups were led away from the country now and the crypto scene is getting bleaker every day. Crypto consortiums are lobbying for the liberation of cryptos, but this seems far from happening in the country. We all can only hope for the best now.