Suspecting dubious transactions and under pressure from the government, top Indian banks such as ICICI Bank, SBI, Yes Bank, HDFC Bank and Axis Bank have suspended accounts of top Bitcoin exchanges in India. Not surprising but as a citizen parking my money in a bank I'm furious as to these behaviour which is unacceptable.
If you are wondering why I think this type of behaviour from custodians of our money is wrong then I recommend that you read my post, "Banking Banana Republic—What Banks Are For and What They Are Actually Doing!"
I've also written about these arm-twisting tactics of Indian banks in my post, "Crypto India: Welcome To The Banking Banana Republic!"
Some of these banks are forcing these exchanges to operate with a collateral ratio of 1:1. Some of these moves have forced certain exchanges to increase their fees. Not only that, IT department is scrutinising them for direct and indirect taxation.
Some BTC exchanges in India operate with 15-20% margins. Scrutiny has been conducted by the IT department in recent raids against all the top exchanges including Zebpay, Unocoin, Coinsecure, Coinome and others.
"The banks have not contacted the company or the promoters regarding the actions you have mentioned," said Sathvik Vishwanath, promoter of Unocoin in a statement to ET.
As you know already, Bitcoin isn't illegal but nor is it legal. This grey status has been causing friction between the government and end users. Lack of regulations has ensured a possibility that these exchanges could be involving themselves in trading at their own platforms-atleast the IT department thinks so after it's initial scrutiny.
I'm of the opinion that the market in India needs to be regulated in order to make it safer for all parties involved to conduct further business. However, these arm-twisting tactics have made it difficult for these exchanges to operate. Cashflow problems are becoming increasingly common. But, these exchanges are finding solutions and implementing them quickly to ease burden of their customers.
I hope that the market continues to grow in India to a larger size making it impossible for the government to consider any bans. Hopefully, they will draft a reasonable framework and make our lives easier as investors and enthusiasts in this space.
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