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Top Indian banks are stopping customers from using their bank accounts for cryptocurrency transactions.
According to The Economic Times (ET), an Indian financial daily, HDFC Bank and the State Bank of India (SBI) have sent official notices to many customers warning them of restrictions and penalties, including permanent closure of accounts.
“Please note, usage of credit card for transactions of virtual currency […] will lead to suspension/cancellation of SBI Card,” the paper quoted from a letter allegedly sent by SBI.
According to the ET report, both banks have cited the central bank’s past public notifications, including its November 2018 circular, which banned banking entities from dealing or facilitating crypto transactions. However, that circular is now invalid, the report noted, as the Supreme Court in March 2020 struck down the curb on cryptocurrency trade in India.
Due to the lack of clarity from the authorities, including the central bank and the apex court, ICICI, India’s largest private-sector lender, has also decided to clamp down on cryptocurrencies. The bank instructed payment gateway operators to close ICICI net banking to merchants buying or selling bitcoins directly or indirectly, according to the ET report.
Payment gateway firms transfer funds from a customer’s bank account to the payment portals of merchants, enabling online transactions through net banking, debit and credit cards, and Unified Payments Interface (UPI).
(Writing by Seban Scaria; editing by Daniel Luiz)
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