Indian Bank Closes Customer’s Account for Bitcoin Transaction

In an attempt to crack down on crypto-related transactions, Kotak Mahindra Bank, a major private retail bank in India, has issued a “Termination of Account” letter to one of its account holders.

The report surfaced as one of the crypto enthusiasts in the country posted a snapshot of the letter on Twitter.

“On review of the transactions done in your above-mentioned account, we have noticed that you have undertaken online transaction/s involving dealings in Bitcoin or a virtual currency,” the official notice stated.

“In this regards [sic], you are requested to visit any of our branches to close your above-mentioned account. In case you fail to close the account within 30 days from the date of this letter, Bank shall be constrained to close the account,” it added.

On January 9, Indian CryptoGirl pointed out that Kotak Mahindra Bank is forcefully taking permission from its users to “reserve [the] right to close” any account without any intimation.

“Kotak Mahindra Bank Limited is one of the largest Indian banks. They have started to show this notice on account creation since past 1 month. This message comes as a ‘one last check’ before account creation and the cryptocurrency tickbox cannot be skipped or unchecked. As a result, to create an account with the bank, we have to agree to the message. Else we cannot begin any online banking service with the bank,” Indian CryptoGirl told

Cautious or Hostile

The bank, in the notice, has justified that it is doing so in compliance with the operational criteria set by the Reserve Bank of India in early 2018 to restrict all banks from dealing with any cryptocurrency businesses in the country.

Digibank, a DBS-backed mobile banking platform in India, is also taking similar steps and is sending notices to its customers dealing in cryptocurrencies.

Another Twitter user by the name VivekMacha also shared a warning flashed by a Kotak Mahindra ATM against any crypto-related transactions.

India and Crypto

Today, the crypto scene in India is murkier than ever. After the Indian Finance Minister declared crypto an illegal tender, the central bank banned all banks from dealing with cryptocurrencies or crypto-related transactions. This drove many crypto startups away from the country.

However, a handful of crypto businesses formed a consortium and appealed to the country’s apex court against the central bank’s decision. The case is still pending with the court.

In October 2018, Unocoin, one of the country’s top Bitcoin exchanges, deployed a Bitcoin ATM at one of the shopping malls in the country. However, weeks after the installation, the authorities registered a case against Unocoin for setting up the ATM without permission and have also arrested one of the company’s co-founders.

(Photo: pixabay)

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