Banks in India have shown certain resistance to comply with the decision of the Supreme Court. It has opened their doors to do business with crypto firms.
The Leading Banks in India & Their Stake on Crypto
One of the leading private banks in India, Kotak Mahindra has taken the first mover’s advantage by allowing the crypto community. The announcement is made by the banking giant that highlights their partnership with the renowned crypto exchange called WazirX. This partnership would enable traders to operate the banking services for the liquefication of their funds.
The partnership is also seen as a major revolution in the acceptance of crypto in the Indian sub-continent. It is because, for the last 8 months, the Indian banks are not allowing payments of crypto including its withdrawals.
WazirX’s Account with Kotak Mahindra Bank
The crypto exchange has initiated an account with Kotak, which will enable the receiving and withdrawal of payments to the traders registered on the exchange. The account is under the process of KYC, paperwork and some other tests, after which it will become operational.
Earlier, crypto exchanges were having extreme trouble in doing business in India as the private banks had restrained themselves from entry into the crypto market. These measures were taken due to limited clarity concerning the regulations. Besides, they were many times found to be operating on invalid circulars asking for not providing services from the RBI.
The circular is subject to rumours since 2018 when the Reserve Bank of India complied with the banks to deny their services in the crypto community. This certificate was further nullified in March 2020 by the Supreme Court. The nullification highlighted that banks were clear to enable their services. Though, most of the banks resisted even after.
The Supreme Court cleared the banks to engage with the crypto ecosystem, however, required them to perform the required due diligence through processes including PMLA, KYC, AML, FEMA and CFT. Besides, the banks were also suggested to look at their financial capacity and the ability to bear risk.
