Friday, December 9, 2022

Kotak Mahindra and Citi Ban Bitcoin Credit/Debit Card Buying

Kotak Mahindra and Citi Ban Bitcoin Credit/Debit Card Buying

After international banks banned their customers from purchasing cryptocurrencies, including bitcoins, using their credit/debit cards, Citi India and Kotak Mahindra Bank of India have also joined their hands in the league.

Also see: John McAfee Apologizes to Binance CEO, Walks Back Outage FUD

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Citi India Nixes Bitcoin Card Purchases

As of Tuesday February 13th, Citi India sent a notification email to credit and debit card holders informing the termination of card use for buying and trading any virtual currencies, viz, Bitcoin, Ethereum and other. The mail read:

“…Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies, and virtual currencies.”

During the annual budget speech, Indian Finance Minister Arun Jaitley had said the Indian government is not considering and move to recognize cryptocurrencies as legal tender and will take all possible steps to eliminate usage of cryptos in illicit financial activities.

Indians cannot use any crypto token as a mode of payment to send or receive money, he added.

Citi bank message

The decision, Citibank said, arose from both global and local concerns including from the Reserve Bank of India. It cautioned members of the public regarding the potential economic, financial, operational, legal, customer protection, and security related risks associated in dealing with bitcoins, cryptocurrencies, and other virtual assets.

Kotak Mahindra Bank Follows the Move

On the same day, another Indian private sector bank — Kotak Mahindra — followed Citi’s move by sending a notice to users to refrain from any transactions involving cryptocurrency.

Indian user Nitesh received a mail from Kotak Mahindra Bank just after he made a transaction to purchase a crypto token. The bank said they don’t encourage customers to use their accounts for carrying out transactions involving any kind of virtual / cryptocurrencies.

Kotak Mahindra Bank

Additionally, the private bank warned customers that if transactions relating to any kind of virtual currencies are witnessed in their account, the bank may be obligated to close your account without any further intimation. They would do this if RBl or any other statutory authority issued such instructions in the future.

The crackdown by Indian banks is likely to affect the wider global cryptocurrency market, as India holds a significant share of trading with a broad investor base, and increasing engagement with the crypto world.

Indian crypto enthusiasts are trying hard to survive in the storm created by the Indian Government, RBI, and SEBI. Recently, the Indian Tax department sent a notice to more than 100,000 crypto investors, asking them to reveal any profits they have made through bitcoin trading.

How will this news affect the market, and what does it mean for crypto investors across the country?

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