Kotak Mahindra Bank has become the first big bank to join the cryptocurrency business. About eight months to stop transactions with crypto investors and exchanges on behalf of the major banks, Wazirx has opened an account in the India major crypto exchanges.
This account will be used to receive and pay the amount from the investors who trading over the exchange. Wazirx closed his account along with ICICI Bank almost a year ago. Due to this, the Reserve Bank of India (RBI) advised banks to stay away from the crypto business.
According to the ET report, the Wazirx account has not yet been operational in Kotak Mahindra Bank. It is being done for paperwork and KYC. The big part of Wazirx's business is near Digital Wallet and Payment Services firm, Mobikwik. After having feared RBI's crypto business, many big banks had banned the transactions related to crypto exchanges and vendors.
ICICI Bank had asked the Payment Gateway operators to deactivate the NetBanking service of ICICI for merchants associated with crypto shopping or sales.
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Payment Gateway Firms work as a third party and it is a custom to transfer funds on the portal of merchants from a customer bank account. The country's largest bank State Bank of India (SBI) also asked Payment Processors to close SBI UPI for crypto merchants.
Crypto Investors are very few compared to other financial assets, but if the Central Government permits the trading of select cryptocurrencies, then this business can increase rapidly. The government is working on making a new law for cryptocurrencies. The government has planned to regulate this business.
RBI had stopped paying a payment to the transactions related to cryptocurrencies on banks three years ago. This instruction was rejected by the Supreme Court last year. However, most banks did not start a business with crypto exchanges.
The bank does not advise its customers to invest in crypto and a major reason for this is not to get any commission to the banks.
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