Indian Bank Closes Customer’s Account for Bitcoin Transaction

In an attempt to crack down on crypto-related transactions, Kotak Mahindra Bank, a major private retail bank in India, has issued a “Termination of Account” letter to one of its account holders.

The report surfaced as one of the crypto enthusiasts in the country posted a snapshot of the letter on Twitter.

"We noticed you did a transaction involving crypto, hence, we will close your account within 30 days"

- Kotak Mahindra Bank

P.S: Glad they're doing it for me pic.twitter.com/JIWzeU54i5

— Shalini⚡ (@DesiCryptoHodlr) January 12, 2019

“On review of the transactions done in your above-mentioned account, we have noticed that you have undertaken online transaction/s involving dealings in Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term or a virtual currency,” the official notice stated.

“In this regards [sic], you are requested to visit any of our branches to close your above-mentioned account. In case you fail to close the account within 30 days from the date of this letter, Bank shall be constrained to close the account,” it added.

On January 9, Indian CryptoGirl pointed out that Kotak Mahindra Bank is forcefully taking permission from its users to “reserve [the] right to close” any account without any intimation.

Indian Banks now forcefully taking permission from us to 'reserve right to close our account without further intimation' if we deal in #cryptocurrency transactions

Ability to decide what to do with our own money is the very reason we need to invest, #BUIDL, & believe in #bitcoin pic.twitter.com/MpP34uqGKe

— Shalini⚡ (@DesiCryptoHodlr) January 9, 2019

“Kotak Mahindra Bank Limited is one of the largest Indian banks. They have started to show this notice on account creation since past 1 month. This message comes as a ‘one last check’ before account creation and the cryptocurrency tickbox cannot be skipped or unchecked. As a result, to create an account with the bank, we have to agree to the message. Else we cannot begin any online banking service with the bank,” Indian CryptoGirl told Bitcoin.com.

Cautious or Hostile

The bank, in the notice, has justified that it is doing so in compliance with the operational criteria set by the Reserve Bank of India in early 2018 to restrict all banks from dealing with any cryptocurrency businesses in the country.

Digibank, a DBS-backed mobile banking platform in India, is also taking similar steps and is sending notices to its customers dealing in Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

After India's Kotak Mahindra Bank, Digibank also starts sending anticrypto notices

"We observed transactions for in cryptocurrencies, hence we are putting a credit freeze in your account. You will not be able to deposit any more funds & within 30 days we will close your account" pic.twitter.com/6eemcOayP5

— Shalini⚡ (@DesiCryptoHodlr) January 15, 2019

Another Twitter user by the name VivekMacha also shared a warning flashed by a Kotak Mahindra ATM against any crypto-related transactions.

pic.twitter.com/ZrWGY4uZpy

— 🔥Vivek🇮🇳🔥 (@vivekmacha) January 9, 2019

India and Crypto

Today, the crypto scene in India is murkier than ever. After the Indian Finance Minister declared crypto an illegal tender, the central bank banned all banks from dealing with cryptocurrencies or crypto-related transactions. This drove many crypto startups away from the country.

However, a handful of crypto businesses formed a consortium and appealed to the country’s apex court against the central bank’s decision. The case is still pending with the court.

In October 2018, Unocoin, one of the country’s top Bitcoin exchanges, deployed a Bitcoin ATM at one of the shopping malls in the country. However, weeks after the installation, the authorities registered a case against Unocoin for setting up the ATM without permission and have also arrested one of the company's co-founders.