Summary:
Kotak Mahindra Bank has entered the cryptocurrency sector. Following an 8-month payment block by major banks, it has become the first bank in India to do business with one of the main crypto exchanges, Wazir X. The cryptocurrency exchange has created an account with Kotak, which can be used to receive and disburse funds to investors who trade on the exchange. This account has yet to become operational due to the completion of essential documentation, KYC, and verification.
Details:
Kotak Mahindra Bank has joined hands with the cryptocurrency marketplace. Following an 8-month payment block by major banks, it has become the first bank in India to do business with one of the main crypto exchanges, Wazir X. According to the Economic Times, the crypto exchange has created an account with Kotak that can be used to receive and send money to investors trading on the exchange. This account has yet to become operational due to the completion of essential documentation, KYC, and verification.
Wazirx had previously opened an account with ICICI Bank, India’s second-largest private lender. However, the account had to be terminated due to the Reserve Bank of India’s implied objection following its crypto prohibition in 2018. Following this, Wazix’s operations were relocated to Mobikwik, a digital wallet and payment services provider. Due to increased expectations and stress in the business as a result of the lack of rules, the following banks have discontinued activities with the crypto industry in the recent several months.
In May 2021, ICICI directed payment gateway operators to disable ICICI Net Banking for merchants who were directly or indirectly involved in the purchase or sale of cryptocurrency. Other significant banks, such as HDFC Bank, Axis Bank, and SBI, have stopped processing payments involving cryptocurrency platforms and merchants. Payment gateway companies serve as the intermediary between a customer’s bank account and a merchant’s payment portal.
In August 2021, the country’s main lender, State Bank of India (SBI), told payment processors to stop SBI UPI for crypto merchants, preventing crypto bourses from receiving cash on its UPI network. The RBI clarified to banks in May 2021, citing the Supreme Court’s revocation of the restriction, that banks are now permitted to operate in the cryptocurrency market.
Credits: www.timesofindia.com