India has taken a notoriously cryptocurrency-averse stance. Last April saw the country adopt new Reserve Bank of India-led measures which prohibited banks from processing cryptocurrency purchases.
Banks force customers to choose between financial institutions and cryptocurrencies
Now, however, it would appear that this crackdown is continuing in an even more aggressive manner. New reports are alleging that banks are now requiring customers to sign contracts promising not to use cryptocurrencies.
Moreover, such contracts are reportedly part of users’ new terms of service agreement, which makes agreeing crucial for bank customers. In a way, this new measure is forcing customers to choose between cryptocurrencies and the traditional banking system.
Although most crypto-supporters believe cryptocurrencies are philosophical superiority to fiat currencies, it is still challenging to only use cryptocurrency. The infrastructure is currently lacking, which would make choosing between cryptocurrencies and banks hard for cryptocurrency supporters.
Moreover, forcing users to choose between these two absolutes – where access to banks is oftentimes vital – will undoubtedly harm adoption.
In fact, the Twitter account ”Indian CryptoGirl” (@DesiCryptoHodlr) has shared an image showcasing the new sort of terms and conditions imposed by banks.
”Indian Banks now forcefully taking permission from us to ‘reserve right to close our account without further intimation’ if we deal in #cryptocurrency transactions,” Indian CryptoGirl noted in the tweet.
Banks can forcefully close accounts if customers deal in cryptocurrencies
This bank in question is the Indian ”Kotak Mahindra Bank,” and it is similarly displaying warnings on its ATM screens:
”Virtual currencies (VCs) are not legal tender and do not have any regulatory permission or protection in India. We request you not to make transactions involving any VCs from any of your account/s. For any such transactions, the bank shall be acting in accordance with the regulatory guidelines which include closing your account without further intimation.”
The bank is citing the Reserve Bank of India’s (RBI’s) regulations, however, Indian CryptoGirl is noting that Kotak Mahindra Bank is just one of many forcing their customers to abandon cryptocurrencies.
Moreover, Indian CryptoGirl later shared a tweet alleging that banks are even adopting this type of measures in neighboring Pakistan. She also shared a screenshot of a message from the Pakistani Faysal Bank, cautioning customers of using cryptocurrencies.
This would seem to indicate that such measures go beyond merely the Reserve Bank of India’s policies from last year. Specifically, the fact that banks in Pakistan – which is outside of the RBI’s purview – are making the same type of warning to customer shows this issue is not endemic to India.
It remains to be seen how this story continues to develop. It should be noted that the RBI has not banned cryptocurrency altogether, meaning that it means Indian citizens are technically free to use it if they wish. However, these most recent reports indicate that banks are now forcing customers to choose between the dominant banking system or the upcoming cryptocurrency system.
Image Source: “Flickr”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.