Indian Banks are Refusing to Process Crypto Transactions: Report

Indian Banks Refusing to Process Crypto Transactions

Indian cryptocurrency exchanges have alleged that some of the country’s leading banks are refusing to process cryptocurrency transactions.

Nischal Shetty, the co-founder, and CEO of India’s biggest cryptocurrency exchange WazirX has alleged that Indian banks still cite RBI’s 2018 decision to deny banking services to crypto companies.

However, in March 2020, the Supreme Court had already struck down RBI’s decision as ‘unconstitutional’.

Despite this, Indian banks are still wary of providing services to cryptocurrency exchanges.

“Confusion in India’s banking industry is hurting 1.5 Crore Indians in crypto. The Honorable Supreme Court of India has set aside the crypto circular of 2018. Banks in India still cite that circular to deny banking. Request @RBI please clarify and help.”

“I request banks in India to update their compliance teams about the Supreme Court ruling that set aside the RBI circular against crypto. It’s not fair that the crypto industry has a clear go-ahead from the Supreme Court of India, and yet banks deny banking to the industry,” he adds.

Just last week, local media reported that one of the country’s leading banks, ICICI Bank has shut down processing payments to cryptocurrency exchanges.

Reportedly, the banks instructed some payment gateway operators to shut off ICICI net banking for merchants involved in buying or selling cryptocurrencies.

India's Stance on Cryptocurrencies Still Unclear

Meanwhile, crypto investors in India are still waiting on the final word from the Indian government on crypto regulations.

Reportedly, a proposed draft cryptocurrency bill was supposed to be tabled in the budget session which ran in two phases from February to March. Since the session ended prematurely, the bill didn’t come up for discussion.

During the time, media reported saying that the bill talked about banning all private cryptocurrencies in the country but allowing exemptions to promote blockchain technology.

Despite the bill mentioning a ban on private cryptocurrencies, statements from the country's finance minister talked about leaving a window open to allow experiments in cryptocurrencies.