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Friday, March 24, 2023

Cryptocurrency Ban in India – Banks Stop Allowing Deposits to Indian Crypto Exchanges

The cryptocurrency ban story in India is getting real slowly. Effective May 2021, most of the major banks will stop allowing crypto deposits. This includes Paytm Payments Bank also.The Paytm Payments Bank will disallow cryptocurrency transactions on its platform from May 21 evening. As per the latest statement they will stop dealing with cryptocurrency exchanges. Most of the major cryptocurrency exchanges in India like WazirX, CoinSwitch Kuber, etc were all using Paytm Payments Bank for instant deposits, which won’t be possible from tomorrow, May 22 2021.
UPDATE 31 MAY 2021 – Banks, including HDFC Bank and State Bank of India, have said that users who deal in cryptocurrencies may face account suspension citing a 2018 circular from the Reserve Bank of India.

This comes after banks on May 20 said that they would no longer deal with crypto exchanges like WazirX, CoinDCX, CoinSwitch Kuber and ZebPay. Reason being an “informal” Reserve Bank of India (RBI) order. Secondly, UPI was already banned and not working and the bank deposits will be stopped too. In conclusion, there is no other way you would be able to make deposits to your crypto platform app.

As per the RBI insiders, it was the central bank that “directed” payment companies to cut ties with these exchanges. They added that this is an “informal” directive and not a written one – similar to the orders sent to banks.

So, even if the cryptocurrency ban in India is officially not supported by Supreme Court, those restrictions will surely restrict the crypto investors and traders.

Earlier this month, ICICI Bank had already made a similar statement of not allowing any more crypto deposits.

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