Kotak, a major Indian bank opens its gates for crypto users in the country despite the government ban, after it partnered with WazirX. Indian banks were slow to accept the Supreme Court’s decision and allowed them to do business with crypto companies but Kotek is the first to open its gates to crypto as we can see more in today’s blockchain news.
The banking giant announced that it partnered with crypto exchange WazirX which will allow the traders to use the banking services and liquidate their funds. The partnership between these two parties is being seen as a major breakthrough for the community because the Indian banks have frozen crypto payments as well as withdrawals for the past eight months. One of the people with knowledge of the matter said:
“WazirX has opened an account with Kotak which can be used to receive and pay money to investors trading on the exchange. The account is yet to become operational. Paperwork, KYC, and some testing are on.”
Private banks in India refused to do business with the crypto platforms because of a lack of clarity on regulations and were often found using not valid circulars from the RBI in order to deny the services. The Reserve Bank of India dates back to 2018 when the Indian Central Bank ordered the banks to avoid offering their services with the circular was later disqualified by the Supreme Court in March 2020 as it cleared the banks to offer these services but it had little to no impact on the actual behavior of the bank.
The CEO of the Industry lobby IndiaTech.org Ramesh Kaliasam explained why the banks refuse to offer the services even after the ruling of the Supreme Court:
“Post RBI clarifying to banks in May this year that they cannot cite the 2018 order as it was set aside by the Supreme Court, banks were free to engage with the cryptocurrency ecosystem. Since then banks have been permitted to engage provided they undertake necessary due diligence processes around KYC, AML, CFT, PMLA, FEMA, besides looking at their own financial health and risk exposures. Hence banks who have done this homework would typically be free to engage with the industry.”
The latest partnership between one of the leading crypto exchanges Wazirx and popular banking giant Kotak hints at positive regulations regarding crypto in the making. The Indian government will discuss the crypto bill in the ongoing winter parliamentary sessions but the industry insiders suggest the government is looking to regulate digital assets as an asset class rather than a blanket ban.
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