Home / Coin Payment / Cryptocurrency investors in India are fighting in the name of having closed their bank accounts

Cryptocurrency investors in India are fighting in the name of having closed their bank accounts


India, the land of one of the oldest civilizations, has existed for thousands of years. To survive for so long, you need a great tenacity and a certain acceptance of destiny. There is also an ability that is colloquially known as "jugaad", the most similar English equivalent is a hack. So when banks in India started to close accounts of customers who were thought to be involved in encryption, people found simple jugaads to get around the exam.

Banks Caught In A Bind

While the supreme court of India has once again postponed the hearing of its case relating to Cryptos, the banks have continued and implemented central banks, the Reserve Bank of India, directive. Compliance with the circular requires banks to apply bans and deny services to customers or businesses that deal with digital assets.

Therefore, banks are required to close accounts that may have made transactions related to cryptography. This means that they are required to make massive sweeps in their customer base and see how people spend their money.

To make matters worse, most of the people familiar with these things have already found ways to circumvent the screening of banks and alternative solutions to avoid closing the account.

How do users avoid account closures?

According to Instashift, a local cryptocurrency exchange, banks close accounts on the basis of a simple search for any word related to cryptocurrency in transaction comments. This means that when a client's bank account is examined by a bank official, they are looking for keywords like cryptography or bitcoins in the comments. If it is found, the account is more likely to be closed.

As you might imagine, the solution is simply not to leave such notations. As Nischal Shetty, Wazirx CEO, explained,

"The majority of people understand that they do not enter into these terms in the comments, simply avoiding to include anything related to Crypto in the payment notes is more than enough to avoid problems with the banks."

He went on to suggest that the banking system has no verifiable method to confirm whether a P2P transaction was used for cryptographic or non-cryptographic purposes.

Echoing the exact sentiment, many twitteratis Indians are posting similar suggestions. One user, Cryptomanic suggested

"Use P2P without writing anything related to crypto in the comment and do not do heavy transactions."

Another, Vivekmacha, agrees and advises to use P2P, since it can not be monitored. He also repeated the importance of making sure that no encrypted term is noted in the comments, for any reason.

More than enough options on offer

One solution that is gaining popularity in recent times is P2P, the peer-to-peer trading style traded on a trust basis. Popularity is not surprising, since the central bank has initiated the ban on digital assets and increasingly encrypted exchanges in India are gravitating towards the offer of this type of trade.

Another simple solution offered is to open another account. An Instashift spokesperson suggested that if encrypted users have their accounts closed, they can simply start a "new account at another bank". With the new account, they simply need to be more cautious and make sure that if they are trading, they do so without using any cryptographic term that might attract attention.

Since all bank accounts are created using a permanent account number, the abbreviated version of Indias of the US social security number, the same person has opted

"It's easy to open a new account for a person in India and the banks also welcome people to open accounts."

Strict action by multiple banks

The closure of the accounts is not, unfortunately, an isolated instance, with many people reporting problems with banks, large and small, closing accounts that show encryption activities. Kotak Mahindra Bank, the banking branch of a large Indian industrial family and Digibank, a bank backed by the powerful Asian financial group, DBS, recently made headlines. They have sent letters to their customers alerting them to imminent closures of the account. A person affected by this took on Twitter.

Indiancryptogirl has published letters that say they have been sent to her. The letter simply claimed to have found some transactions with brokers dealing with virtual currencies. Since India did not consider such transactions legal, the bank was

"Forced to place a credit lock in your account, and based on existing guidelines, we are required to exit from these reports where transactions with brokers / traders who process virtual currencies are observed."

The letter ended with the notification that

"So within 30 days from the date of this communication your account will be closed by the bank."

This is not an isolated case of some customers who have chosen the bank with an affiliation to encrypt, many of these cases have come to light in the recent past. Telling a similar story is Pushpendra Singh, who makes a bank with the smaller UCO bank, but says that this same modus operandi was also followed there. A similar complaint reverberated in the words of Bluecrypto on Twitter that he said,

"The same happened to me and my HDFC account was closed."

Not only that, but most banks now also follow a similar policy as the Standard Chartered bank that explicitly requires, those who are trying to open an account in India to specifically agree not to undertake any kind of digital asset transactions.

The question of the banks that decide for their clients how they can spend their money is at the forefront and at the center of this story. However, as Yatharth Vashishth pointed out, banks are not the only bearers of this burden because they are only following the RBI order.

"The Bank acts according to the rules of the RBI All banks are responsible for closing the accounts of all the entities involved in cryptography."

It seems that the banks are unlucky and forced to follow the line, established by central banks and, many suspect, by a government that does not trust the technology. While it is to be hoped that notoriously lethargic nations will come to the rescue, it is already clear that the second most populated country on the planet is working on hacks to join the encrypted market and the blockchain revolution.

Source link