Indian bank Kotak Mahindra closes account of crypto user

13 Jan, 2019
by David Robb
Indian bank Kotak Mahindra closes account of crypto user

A major Indian bank is apparently taking action against customers that use cryptocurrencies. Kotak Mahindra shut down the account of one woman for making a crypto transaction.

Indian Crypto Girl (@DesiCryptoHodlr) posted the evidence of the banks's activities on Twitter. According to a letter she received, her account was being closed due to "online transaction(s) dealing in Bitcoin or a virtual currency". It claims that "the regulator" has mandated the banks to close accounts who do transactions in BTC or other cryptos, and it is following the necessary procedure.

Although banks closing customer accounts that are linked to crypto is not a new phenomenon, it happens more often when a business has been conducting unregistered crypto activities on a relatively large scale, and assets are frozen by the bank, pending legal action. Taking action against individual retail customers is still relatively rare.

This is doubly surprising as Indian financial authorities, while far from crypto-friendly, have still not offcially decided on any clear rules concerning crypto. Warnings have been issued by state police against investing in crypto, and the Reserve Bank of India (RBI) has stated that crypto has no legal protection or permission, but the RBI also claimed that cryptos are "not a threat" and its position on their usage may be due to change in the near future.

Read more: 'Don't invest in Bitcoin!' Indian police authorities warn'Cryptocurrencies currently not a threat' according to the Reserve Bank of India

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