How Indian Cryptocurrency Users Avoid Banks Closing Their Accounts

Banks in India have been closing the accounts of customers they believe have made transactions involving cryptocurrencies. The majority of crypto users in the country, however, have reportedly found a way to avoid their accounts being closed by their banks which are complying with the crypto banking ban imposed by the country’s central bank.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Avoiding Problems With Banks

Reports of banks in India closing customer accounts with cryptocurrency-related transactions have been on the rise. Banks cite compliance with the circular issued by the country’s central bank, the Reserve Bank of India (RBI), that bans them from providing services to customers and businesses dealing with cryptocurrencies.

A spokesperson for local cryptocurrency exchange Instashift told news.Bitcoin.com that banks have been closing the accounts of customers when they find any cryptocurrency-related words such as “bitcoin” in transaction remarks. He clarified that if a customer’s bank account “comes under scrutiny and the bank officers read the crypto keywords in remarks” then the bank account will be closed.

The CEO of crypto exchange Wazirx, Nischal Shetty, shared with news.Bitcoin.com on Tuesday that the:

Majority of the people understand not to enter such terms in the remarks. So simply avoiding entering anything related to crypto in the payment remarks is more than enough to avoid any problems from banks. There’s no other way for banks to know if a P2P transaction was done to transact in crypto.

Other Indian crypto users agree with this strategy. Twitter user Cryptomaniac advised, “Use P2P without writing anything related to crypto in remarks. And don’t do heavy transactions.” P2P is the exchange-escrowed peer-to-peer style of trading which has been growing in popularity since the RBI ban. Most crypto exchanges in India offer this type of trading. Another Twitter user, Vivekmacha, agreed and wrote that “If we use P2P they can’t track us,” emphasizing the importance of not writing any crypto-related terms such as bitcoin or BTC in remarks when making transactions.

The Instashift spokesperson explained that crypto users that have their bank accounts closed just “open a fresh account in another bank” and continue to trade without “using any crypto terms for transactions,” emphasizing:

It’s easy to open a new account for a person in India & banks also welcome people to open accounts.

He noted that “no matter how many accounts you open, all bank accounts get linked with your PAN card” which he said is similar to the social security number used in the U.S.

More Banks Closing Accounts of Crypto Users

Many banks in India have been closing customer accounts showing evidence of cryptocurrency transactions. Two major banks in the country — Kotak Mahindra Bank and Digibank — have recently gained more attention for doing so when Twitter user Indiancryptogirl posted letters she claimed to have received from them. Digibank is powered by DBS, a major Asian financial services group. “We have observed few transactions in your account with brokers / traders, dealing in virtual currencies,” the letter reads, adding:

Since these types of transactions are not permitted in India, we are constrained to place a credit freeze in your account. Further as per the extant guidelines, we are required to exit such relationships where transactions with brokers / traders, dealing in virtual currencies are observed.

A credit freeze, the bank explained, means that customers “will not be able to deposit any funds” into their accounts. The bank proceeded to inform that “Hence 30 days from the date of this communication your account will be closed by the bank.”

Kotak Mahindra Bank and Digibank are not the only ones taking a hostile approach toward customer accounts showing crypto transactions. Twitter user Pushpendra Singh wrote, “So many Indian banks doing the same thing,” claiming that one of them is UCO Bank. Another Twitter user, Bluecrypto, said the “same happened with me and my HDFC account got closed.”

Another bank with a similar policy is Standard Chartered bank which requires customers opening an account in India to agree to this statement: “I confirm that this account will not be used for settling transactions or dealing in virtual currencies, including but not limited to bitcoins.”

However, Twitter user Yatharth Vashishth pointed out that banks are only following RBI’s order. “Kotak Bank is acting as per regulations by the RBI. All banks are instructed to shut accounts of all entities dealing in crypto. Not a big deal.”

What do you think of how Indian crypto users respond to banks closing their accounts? Let us know in the comments section below.

Images courtesy of Shutterstock.

Need to calculate your bitcoin holdings? Check our tools section.

The post How Indian Cryptocurrency Users Avoid Banks Closing Their Accounts appeared first on Bitcoin News.