Most banks operate in a very simple way, you keep your money there, they give you some interest and charge a lot more from those they have lent the money to. But with the advent of crypto, money is moving out from these banks. Now tell me who is going to keep their money in a savings account giving 5-7% interest annually when you can get more than 100% return every year easily with crypto. This is why banks are getting weary of the situation as money is moving out from their accounts and staying on exchanges. Hence, RBI might be informally probing banks to cut ties with Indian crypto exchanges.
What is happening between banks and Indian crypto exchanges?
If you are a crypto investor you might also have faced the deposit problem on any Indian exchange you might be using. This is because even though crypto isn’t banned in India, banks are creating problems for the industry. They are cutting off payment portals and are also not working with crypto exchanges properly. And reports have suggested that RBI has unofficially been probing banks to do so. This is a big problem for the industry and also shows monopoly in the country. Just think, it’s your money in your bank you should be allowed to use it wherever you want considering it’s legal.
Even now, there was an air of doubt regarding the future of cryptocurrencies in India. But now even though there are no proper regulations, the NPCI said that it will not ban them. So, it is not morally and legally right to ban exchanges from using their service. The biggest name among all these is ICICI that has asked payment service companies to stop working with crypto businesses.
The RBI is now doing whatever they can to bring the businesses down but they fail to understand the gravity of the situation. Only if Indian banks started to offer crypto services like US banks the money could stay with them. The market of crypto in India has already become more than $1.3 billion. And there are also over 10 million investors. RBI has also played the classic money laundering card as said by the source of the ET.
Indian banks are hurting India’s economy
From a short-term view, one could say that they are just trying to preserve the business but in the long term, everything will be turned to dust if they don’t accept change. Until banks realize that yes crypto is the future and it is here to stay they won’t accept it. If other countries start accepting crypto as an asset but India doesn’t, the country will fall behind in terms of innovation in the financial industry.
What are your thoughts on the Indian banks not willing to work with crypto exchanges? And do you think this move will be able to stop the 10 million people from investing in crypto exchanges? Let us know in the comments below. Also, if you found our content informative do like it and share it with your friends.