Users not able to deposit money on Indian crypto exchanges right now, as banks get cold feet
- According to media reports, an unofficial guidance from the
Reserve Bank of Indiahas put banks and lenders on the edge.
- There’s also not much that the exchanges can do, unless they want to sue the banks for wrongfully discriminating against them.
- Industry executives have said that they are working to get more bank partners onboard.
Why are rupee deposits not working?
According to media reports, an unofficial guidance from the Reserve Bank of India (RBI) has put banks and lenders on the edge. The informal communication from the
“If you make any INR deposit via IMPS/NEFT/RTGS to our PayTM Bank account after 11:59 p.m IST, it will revert to your source bank account within 7-10 business days,” WazirX said in an official communication to users on May 20.
When you make a deposit to any exchange, the money goes from your bank to a payment processor (also called a payment gateway), which then sends it to the
Can banks do this without an official directive?
It’s just like a restaurant can reserve the rights of admission for its guests, banks can choose not to do business with any entity. This is why banks can stop doing business with crypto companies despite the Supreme Court striking down the RBI’s official directive in March last year. The RBI guidelines have simply put them on the edge, and they’re choosing not to lend money, fearing what future regulations might lead to.
There’s also not much that the exchanges can do, unless they want to sue the banks for wrongfully discriminating against them. While India’s crypto industry has done well over the past year, it’s unlikely that crypto companies will want to take on expensive lawsuits right now. Industry executives have said that they are working to get more bank partners onboard.
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