Paytm, the largest mobile commerce platform in India is allegedly freezing bank accounts of cryptocurrency traders, despite being legal in the country.
Reports said that there were offers INR wallet and INR banking services. “So P2P or spot, users can use this bank account to receive money or to send fiat to deposit in exchanges. And those bank accounts are being frozen.”
This is another case of controversial decisions from a bank in the country. Last July, Axis Bank, India’s third-largest private-sector bank, called out its users to confirm if they are using the accounts for cryptocurrency trading.
A surprising note as well is that the bank, who has 450 million users, also warned that it would block accounts used for this resolve.
Earlier in March, when the Supreme Court has not quashed any order, several banks were shutting down suspected accounts involved crypto trading.
All these bannings can be traced back to a circular by the Reserve Bank of India (RBI), the country’s Central Bank which prohibited banks from providing service to entities dealing in crypto.
After the RBI ban was lifted, however, several banks reportedly still denied the business with crypto, including exchanges, claiming that they are still waiting for the bank’s confirmation.
In a Right to Information (RTI) application released by RBI, specifically reiterated that there is no prohibition on crypto exchanges, businesses, or traders in the country. But they added that “Banks banks can act in their interest, so users are advised to take caution.”
Another confusing part of the policy implementation was the bill seeks to ban virtual currencies. This was drafted by an inter-ministerial committee (IMC) headed by former Finance and Economic Affairs Secretary Subhash Chandra Garg, who has since resigned.
As well, no legal framework has been outlined while waiting for the approval of this bill.
With this, the Indian crypto industry believes that the government will re-examine the bill given that much has changed since it was submitted.
Several ministries have expressed plans to ban this, but some experts say that a total halt will not happen anytime soon.
The country still does not have a legal framework for cryptocurrencies, but the government says that a crypto bill is “awaiting approval.”