India’s 1st digital bank, Digibank, is allegedly closing accounts involved in cryptocurrency-related activity. The claim was made by Twitter user “Indian CryptoGirl” (@Desicryptohodlr) during a tweet posted January. 14.
As antecedently reported, the same Twitter user had only recently posted details of alleged anti-crypto restrictions being obligatory on account holders by Kotak Mahindra Bank, India's second largest private sector bank by market cap.
Both banks’ reported measures come in the context of a prohibition on domestic banks’ dealings with crypto-related businesses, that was declared by India’s central bank, the reserve bank of India (RBI) last April, taking impact in July.
According to Indian CryptoGirl’s tweet, Digibank — that is in hand by Singapore-headquartered, major multinational financial services company DBS — imposed a credit freeze on her account when allegedly detecting transactions with entities identified as being digital currency traders or brokers. The bank’s notice reportedly suggested that she ought to henceforth be prevented from making any longer deposits, and will expect to own her account closed within 30 days.
In a non-public comment to Cointelegraph today, Jan. 15, Indian CryptoGirl clarified:
“I have been a user of DBS' Digibank for a year. Though I often used Kotak Mahindra Bank for my cryptocurrency transactions, I used Digibank solely 7 times throughout the year. On January 14th, I received multiple messages from my twitter [sic] followers concerning an account closure notice by digibank [sic]. I checked my mailbox and found the mail myself.”
According to a screenshot of the e-mail enclosed within the tweet, Digibank additional allegedly stated:
“Reserve Bank of india through their public notices have warned/advised [the] public concerning risks related to virtual currencies. we reiterated the same vide our emails dated 4th may 2018 and 2nd August 2019, cautioning our account holders [against] the risks associated [...] which DBS accounts and debit cards mustn't be used for [their] purchase or any kind of dealings.”
Commenting on the e-mail, and in particular the bank’s alleged claim that “crypto transactions don't seem to be allowed” in India, Indian CryptoGirl told Cointelegraph:
“Banks have taken RBI's guidelines as per their own convenience [...] This but is equal to taking the law in your own hands. RBI has solely prohibited banks from operating with businesses giving cryptocurrency solutions and NOT individuals from trading cryptocurrencies between them.”
Yesterday’s tweet has drawn a variety of responses, with some users alleging that not solely Digibank and Kotak Mahindra, however conjointly UCO and India Bank are limiting crypto-related activities. These claims haven't been supported to press time.
Many used the chance to advise Indian crypto users to trade peer-to-peer (p2p) to avoid problems with banks and government authorities.
As reported , RBI’s disputed banking blockade has sparked each public and industry-led petitions, some reaching the judiciary. Nonetheless the country’s Supreme Court has repeatedly stayed a final decision on the matter.
Despite an onslaught of negative news and endemic lack of clarity — together with rumors the govt. has mulled the outright criminalization of crypto within the country — reports in late Dec advised the tide may nonetheless turn to affirm the sector’s legality.
Earlier this month, RBI revealed its monetary report for 2017-18, that all over that crypto currently poses no threat to financial stability. Authorities across the country in the meantime still persistently warn the general public against the risks related to unregulated crypto investments.
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