January 12, 2019 by Hitesh Malviya
One of India’s largest private sector bank has allegedly asked all account holders to suspend cryptocurrency activity using their accounts. In a series of warning on ATM machines and decrees, the bank has allegedly asked all bank customers to stop buying, selling and using cryptocurrencies. The bank in question happens to be the second largest
One of India’s largest private sector bank has allegedly asked all account holders to suspend cryptocurrency activity using their accounts. In a series of warning on ATM machines and decrees, the bank has allegedly asked all bank customers to stop buying, selling and using cryptocurrencies.
The bank in question happens to be the second largest private bank in the country, that is Kotak Mahindra.
Twitterati At the Forefront
This issue was brought to the attention of the cryptocurrency community by the Twitterati. When an account under the handle @desicryptogirl tweeted a screenshot in which Kotak Mahindra appealed to its customers to suspend dealings in virtual currencies.
In the screenshot provided by this user, Kotak Mahindra makes explicit connections to the Reserve Bank of India decree dated 6th of April 2018 in which the Reserve Bank of India told all banks to withdraw support within three months.
Kotak Mahindra, in its move against the cryptocurrency market, has also allegedly asked all users to sign a consent form stating that they are not involved in the cryptocurrency market and will not get involved in the future as well.
The consent form was worded like this;
“Basis [sic] the regulations issued by RBI, 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.”
This tweet then gathered a lot of attention in the Twitter circles. Where another user posted an unverified picture of an ATM screen that quoted Kotak Mahindra warning users of that virtual currencies are not protected nor legal under the Indian Constitution and regulations.
The warning said;
“Virtual currencies (VCs) are not legal tender and do not have any regulatory permission or protection in India. We request you not to make transactions involving any VCs from any of your account/s [sic.]”
Some Twitter users also called for legal action to be taken. But as of now, the tweet remains simple news which is still unverified.
The state of the cryptocurrency market in India is constantly subject to change. While the Reserve Bank of India called for a blanket ban on the cryptocurrency market in April. They later on admitted that the move may have been a little hasty and that the decision was taken on the basis of a committee’s input.
While the decree is still tied up in court, there is no clarification on the actual regulatory measures that India has in place. However, with the RBI decree being enforced, right now the market remains unregulated in the country.
The Reserve Bank of India also shelved their project to make the first nation cryptocurrency as well in the first week of January. They claimed that it was too soon and would be totally premature to create a virtual currency with no regulation in place.
Only last week there was a committee that announced that they were in talks with the government regarding regulation. And that they had written up a document that would be forwarded to the Parliament. However, there have been no moves made after that.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.