Bitcoin Forum

Even though cryptocurrencies like : Bitcoins is legal in India apparently the banks do believe they have a power over the users and there have been statements from the verified users regarding:

1. Paytm freezing bank accounts which are involved in Crypto trading , OR , the accounts they suspect are involved with the trading of cryptocurrencies

2. Axis bank freezing accounts related to Cryptocurrencies

3. Axis banks asking customers to sign how they are not using their bank accounts for crypto trading and such.

https://news.bitcoin.com/paytm-freezes-indian-bank-accounts-cryptocurrency-trading/ (https://news.bitcoin.com/paytm-freezes-indian-bank-accounts-cryptocurrency-trading/)

Here I would like to extend this news with a statement from RBI:


Which further shows us how centralized the government is and how users even though are not taking part in any illegal activities can be banned for no reason . Apart from that the bill which is going to ban cryptocurrencies for once and for all has been a matter of combat between the crypto enthusiasts and the Governmental authorities.

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The Government is creating hardships for the people who are living in India and are dependent on the virtual currencies. At the same time people are being tracked , media is doing little or no justice to the image of Bitcoins and other cryptocurrencies , amongst all this how can the Biggest democracy in the world neglect it's citizens.



This statement itself shows how the banks and the Government itself is creating mockery of what the kids are taught in school itself :
Government is to the people , for the people , by the people

What the students should be taught is: Government is embodiment of the shadows of the rich and the wealthy people in the society and chooses to follow them , enabling the Centralization and the corruption to grow when the common man suffers and is restricted from their personal choices in the matters that the government thinks can harm the country or could reduce their power.

Bitcoins is here to stay , I do believe that hopefully the Government will realize this and work towards building a crypto friendly economy.

I choose to share this article because I do believe the Indian people who are using their bank accounts connected with the wallets should be careful regarding which bank they are dealing with and try and  clear this out with your banks before they ban your account and you have to run time and again in the office to get your remaining money which is now locked and needs like 100 signatures to be safely transferred to you .

Plus please make sure to see if you bank does allow crypto trading because often we tick every new column that pops up in the online banking every once in a while but fail to see what they might have in board for us.

Plus you can try and use DBS , the online bank account which I am using since 4 years for trading and didn't face any problems till now .

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Another country choosing to stay back.. while Bitcoins by integrating themselves with the economy of the countries accepting the new norm is taking them years ahead . Genuinely.

[It's a technology of the future and I do believe we need young people who are Motivated towards the IT sector to help and run the Government instead of people who are too old to change.]

Is there any future of Bitcoins in India ?

The below statement of RBI itself is flawed and kept the gap open so that the banks can work against the interest of the account holders.


With this statement, now even banking ombudsman won't help to unlock the freezed account because banks are not acting against RBI statement.

Sonner or later, cryptos will be banned India because when building a temple become a matter of national importance even in the COVID situation - it clearly notifies that India has started moving backwards!

Banks are allowed to freeze accounts when they believe the activity is suspicious, right? And do we know for sure that those whose accounts were freezed were trading on licensed exchanges that legally operate in India, and were complying with trading-related legislation? Was this money legally earned, were they paying taxes for trading (if they're obliged to)?
India has has struggles with accepting Bitcoin, and banks are the natural enemies of cryptocurrencies, so I'm not surprised they are being hostile. However, just as op, I hope that this anti-crypto stance will not persist in India, and people won't have troubles using them there.

While India does not yet have a legal framework for cryptocurrencies, the government has reassured its citizens that a crypto bill is already awaiting approval. Coin Crunch, an Indian crypto news outlet, reported on Monday that, “Many users are reporting Paytm is freezing bank accounts of Paytm payments bank account holders with suspicion of crypto trading”. Some customers also reported being asked to sign a declaration form confirming they, “do not deal in any type of virtual currency transactions” through their accounts at the bank.

Yeah, I'm trying to stay as far away from banks as possible although I'm non-Indian and there's no sign of crypto ban in Europe. Banks always acted as saviors and "your best friend" but have always been the exact opposite. Mixing centralized systems with an overpowered institution and cryptocurrencies could turn into a big mess at any given time. The fact that a bank has the right to decide at any point to freeze someone's account because "the activity is against their interest" although the said activity is in no way illegal is a big pile of BS.

I don't know what's happening lately in India, there are some movements where applications and platforms like Mobile Legends (MLBB) and TikTok has been banned operating to their country, there are more apps that will be permanently banned in India about 50 more. And now they are banning crypto again, anything that revolves with crypto including the financial institution that deals with crypto which I think is not a good decision considered by their government. I think they also see, and focused on it's bad side coz it might be used in illegal activities and didn't look at the business opportunities that it can provide. This is so sad  :(

So why are you directing your hate towards the government when banks are acting like this on their own?
You just mentioned that you have used a bank to transfer (probably) funds in and out of an exchange for 4 years, and the bank has not taken any action, so it comes down to the banks you're using.

Besides, you're making a wrong assumption, banks are not intervening in the crypto transfer as they obviously can't, they are flagging down accounts involved in what they call suspicious activity with fiat transfers, nothing will change if cryptocurrencies will be legal, banks will always have the power and unfortunately also the legal right to close down or limit your account if they think something wrong is going there. Things like this are not limited to India, we have such cases even in Europe, I have a few friends who got questions about the source of funds they were receiving, the funny part is that they were dealing with less money than me and I haven't got one notice.
For most of the banks, it's simply that they want to avoid any further hassle or inquiry, they are happier with people getting their daily wage in the account which is tracked amount than people who might bring an investigation and what that investigation might uncover totally unrelated to the case.

Simply close your account and move to the other one, if all those 5 million you said are crypto users in India would do the same banks will take notice.
Or better, stop using banks altogether, I thought that was the point of crypto, right?

If banks are freezing accounts which is against the court order then it is possible to take legal actions against them right? People trade through p2p are most likely won't get caught for this because it is going to be a random person to person transaction so if the banks are acting in this way then better find a way to confuse them.

If banks in India are so tough against the use of cryptocurrency by citizens, it is necessary not to use their services where it is related to cryptocurrency. After all, you can use cryptocurrency without being tied to bank accounts and bank cards. It must be remembered that banks clearly work according to the instructions that are given to them from above. Therefore, one should expect the emergence of regulations of the government and legislators of this country regarding the regulation of cryptocurrency. Only after that the banks will work in the legal field.
In the meantime, there is still a legal vacuum in India regarding cryptocurrency. Cryptocurrency is not allowed there, but it is not prohibited either. Everyone must decide on the laws to regulate cryptocurrency.

I believe they have taken this decision considering the current financial situation of country. Just look around India and status of finances, it’s breaking apart.

Now you can direct this concerns with the people who are holding big bags of Indian currencies in the form of bitcoin. We can’t deny this includes, entrepreneurs, politicians, Bollywood personalities and more.

I think this fact can’t be denied in first place and government knows how they are hiding their TAXES,,!

These are few of the points we shall consider in discussion.

Well, this is just an assumption but I think it’s close one. And of course bad for rest of us who are trying passive income ways through this.

I don't think bank would just freeze account of their customers on their own without a directive from the government or regulatory bodies. I don't know how it works there but banks always tries to keep their customer with them. They won't be troubling people for just using the banks to buy legal things. One situation maybe the number of fraud calls originating on transactions, but I don't think that would be large among legit crypto traders. Often non crypto networking schemes are also sold as crypto to naive investors around the world.

It depends on case to case and how their bank transfer histories are. If they did something suspicious, money laundering, illegal money etc. Banks do have right to freeze such accounts and frozen account owners are not considered as victims if proofs show they broke banks' ToS and the local laws as well.

I think that’s correct.

Bank need people more than they need bank. I mean people can always take money and buy gold, silver, and bitcoin in our case. They can always find a way to store money.

Honestly, bank runs through the money that they collect from people. They charge interest against loans (many kinds), and that’s how they get income.

They can’t just go on blocking the accounts.

Indian Government have no such restrictions against cryptocurrencies but these Indian banks always have a grudge against bitcoin.
Even though the Government has not passed any law to freeze the bank accounts of crypto holders, the bank freeze their accounts.
Personally I have been trading crypto for years now but I have not encountered any such incident so far.
So I think the banks only freezes the accounts of suspicious users and not all crypto holders.

Maybe the banks were experiencing downfall in the annual revenue. India is one among the country that has got huge increase in the users over the past few months time. If I'm not wrong the cryptocurrency markets growth is the main reason for the ongoing freezing of accounts. Localbitcoins is the platform thats been used much for the trading purpose. Right now almost every trader is perfectly registered with the bank for taxation. So there is no need of blocking accounts of the customers.

This is certainly very frustrating.  Here in the United States we've had issues with all sorts of institutions having issue with cryptocurrency.  At one point you could use your credit card to purchase crypto, then you couldn't now I think you can.  PayPal has had issues etc.  Hopefully things start to change.

I don't think this is at all surprising. India can not yet decide how to treat crypto. They either accept crypto or ban it.

You have raised so many valid questions and I think these are bases for banning or seizure and freezing of accounts. If users don't comply to rules of doing business and taking to illegal dealings, banning might be inevitable.

If cryptocurrency (a currency) trading is not illegal, why then would the banks freeze the accounts? Is it not possible or easy to report the banks that are violating that part of the law/rules that say "trading crypto is not illegal"?
A company's interest cannot be above the Just "Law of the Land" it operates.
By the way, I wonder where on earth it's illegal to trade or exchange one currency for another.

Individual banks have been closing accounts of their customers who deal with crypto all over the world and for a long time. Some banks see it as a risk that isn't worth taking. I think this just highlights how low the adoption of crypto is currently is, crypto was supposed to disrupt banks, but it's practically impossible to live without a bank account these days, especially if you try to go 100% on crypto. So, until it changes, you should be careful with your bank, research if it tolerates crypto or not, maybe get a separate account for withdrawing crypto.

i thought its already possible with the debit cards created by the crypto companies today like Binance and crypto.com so the reason why they were hyped.

seem a confusing time when governments are allowing crypto currency yet banks can somehow just block any transactions and freeze accounts. don;t it look like its the bank that run the government?

Paytm accounts are often hacked and used to buy bitcoins on websites like Localbitcoin and that is the reason of the received account gets frozen when the real owner of the send account report it to the bank, which doesn't mean all the trading activity accounts will be blocked by the banks when the country allows them to do.And this problems exists everywhere that is why stop trading with random newbie unverified accounts who are the one involved in such kind of activities.

I have read the news that PayTm is freezing the accounts of users that are dealing in cryptocurrencies even though there is a supreme court order but as avikz mentioned they are playing around the lack of rules and regulations and the bank has the authority to determine what they allow and what they ban and i believe there is some involvement from the government for them to ban the users dealing in cryptocurrency.

@akram143 as you mentioned there is another possibility that PayTm was used by hackers in the past to steal others account and purchase BTCitcoin and may be that is the reason behind this decision to ban anyone dealing with cryptocurrency.

Any government can authorize any of her institutional arms to act according to the laws of the land, India government had since be against suspicious financial movement and this won't change in time to come. Ensuring the citizens are protected and the government can be trace to this move by India Banks.
 
Here in Nigeria, you're put on check when it come to financial transactions according to MLM act. This is normal to any government to flag any suspension transactions, so, those without any won't be flag. I was flagged by First Bank PLC but careful explanation gave me scale through and funds were released.

I would still believe Paytm Indian Bank has a valid reason for freezing those user's accounts.
 It must be a suspicious activity even they had submitted cryptocurrency trading as their source of funds, banks has a way if it is true or not.
 
 On the other hand, giving the fact that some clients are having a legit income from cryptocurrency trading, Indian banks are just complying and afraid not to follow RBI's order;
 
 
 This explains why Indian banks freezes their accounts even crypto is legal in their country.

Indians are hating crypto too much

you don't have to put all Indians in the same pot because it seems to me that this is the exclusive decision of a small group of bankers who look at bitcoin as something that should be destroyed by preventing people from using their banks to make transactions involving bitcoin. but this is expected when the government itself does not encourage banks to deal with bitcoin.


I wonder how can someone who makes money from signature campaign, bounty and trade, offer income statements at the bank? this is a very difficult situation to resolve especially when the person earns in US dollars and when converting to local currency it becomes a very high value higher than many minimum salaries in the country

India will be left out if they insist on going against rather than embrace Bitcoin. Sooner or later, Bitcoin will become accepted in all countries, if not accepted at least it would not be made illegal. Even the US which started early on to be a strong enemy of Bitcoin eventually realizes that they cannot stop it and they better regulate its use rather than let their citizens use it outside the bounds of law.

For me, it is just a matter of time before India will finally set the green light. After all, this is just a matter of leadership and we all know that leaders don't stay at their positions for long.

Some of this bank fear being penalized for being involved in helping transacting money earn illegally or through a scam and which is the reason why many of them freeze an account of the customer. I have ones read about a money that was sent through Paxful transaction to a bank but later, it was discovered that the money comes from scam settlement. Such is part of the reason why they freeze accounts. If anyone has his account frozen then he should find out the reason behind it. Especially in countries where crypto is legal

The real cause for concern is identifying what the accounts that the banks froze have in common other than the trading of crypto currency. For the fact that moving cash is legal, there are still some regulation around that space and if anyone should move funds beyond the allowed maximum, then he should be ready to provide the necessary explanations which is the reason why despite the fact that crypto trading is legalised, it does not remove the function of the bank to ensure that the laws regulating the industry is not circumvented.

Remember that banks are under government control and if your money is in circulation for a suspicious purpose they will inevitably be under control. Bank has the right to do that, please study the laws and regulations related to cryptocurrencies.

Cryptocurrency in India is not prohibited and as we all know banks don't want cryptocurrency to exists.Because if they do there transaction with crypto it will be a loss for them.So it’s  better to use crypto with out giving bank any information about it.so they cant freeze  bank accounts.

The crypto are not yet illegal in the country so in such case it should not be freezing it unless some of the account is suspicious and where some misconduct is happening it. rest it should still be operative and not sure why they have started freezing the accounts again. this would hurt the people and during this pandemic when people require the money the most and if account is freeze where will they go?

The system doesn't work the way we want it to, banks can identify the users dealing in cryptocurrencies by checking the transaction history of the account holder and also relating it with the accounts from which the user for the funds, although the process will definitely be more complicated than written here.
Still, it is pretty unfair to have such a monarchy in a democratic country where users don't have freedom of doing transactions and having a continuous fear of their banks freezing their account for doing transactions in cryptocurrencies. Right now India is not having any restrictions on Crypto usage then why freezing the accounts of the users dealing in cryptocurrencies.
I guess now users will have to sell their coins for cash and not do any dealings in Crypto to bank accounts until the stance of the government doesn't get cleared on the legalisation of cryptocurrencies in India.

I haven't heard about this, but won't be much surprised if it happens. PayTM doesn't have any additional security measures. If you can unlock the smartphone, then you can use the PayTM account which is installed in that phone.They never ask for any additional verification. Anyway, what is the use of additional features such as OTP, when the smartphone is already unlocked?

@Detrix are you sure that Bitcoin has a bright future in India, because when I speak with my Indian friends and read online news from India regarding Bitcoins, they all say the same thing that Indian Government is planning to ban crypto currency trading out there. Furthermore I don’t think that Indian banks like crypto’s, hence they’re pushing the Indian government to ban crypto’s in India.

Source

https://www.moneycontrol.com/news/business/economy/india-to-ban-trade-in-cryptocurrency-government-working-on-a-law-5642461.html

https://cointelegraph.com/news/indian-banks-act-slow-to-accept-crypto-industry-despite-rbis-approval

https://www.ledgerinsights.com/india-central-bank-cryptocurrencies-threaten-banking-system/

This is strange. I know a lot of people who use their bank accounts for trading with Localbitcoins or Localcryptos. As far as I know, none of them have faced any issues with the banks. I don't know much about PayTM Savings Bank accounts, because I have never used them. I guess most of those who got banned were doing large-scale trading of cryptocurrency, unlike those who do peer-to-peer trading.

Indian has been spotted with hatred for cryptocurrency and Bitcoin at large but doing this as a developing country won't help Indians from low livelihood. Government has always frowned at cryptocurrencies as illegal digital currency, hope this come to end soon, as this will have negative IMPACT on cryptocurrency price. This industry need countries like India for full fulfilment of global adoption, though this can happen with or without Indian.

It is not fault of Indian government actually, but indeed the situation that exists within country. India has huge portion of rich people and most of them includes political bodies. It has been identified that many of them are hiding their assets in the form of crypto currency to overcome the tax problems. This is more or less black money and it is the reason why poor is getting poorer in the India.

Government gets affected indirectly, and it is one of the popular country in the world who had been investigated with huge amounts of black money stored in the form of cash, gold, Swiss bank accounts.

Now, crypto has given out whole new possibilities to do the same without even revealing the identity.

I am also indian and using different banks for crypto currency transaction although i didn't receive any warning or my account is freeze by any that particular bank. Even though i am not using for high amount of transaction but using personally and regularly. I think users received warning if they had abruptly using and transaction are counting as greater than normal usage. Even Bitcoin has no restriction in India even bank doing enquiries and all stuff this is very serious issue.

Bitcoin remains as usual in India.

If i am not mistaken and if i collect topics about bank of india which freeze accounts maybe 10-15 topics there.

If I look at the same topic again, so I assume the Indian government / officials, not 100%, are taking action on it.

More precisely I believe more in the answer given by; @jseverson.


How do you think it makes sense, and the answer is answered by: @jseverson.

I don't understand why the banks are doing it even if they can act on their own because it is like they are fully against in crypto trading or anything related to cryptocurrencies.

If there will be other banks that are not doing such a thing then it will be good if you will just avoid those banks that keeps on pressuring the crypto users by freezing their
bank accounts. I will just hope that there will be no money that were lost because of their action as every single money that a crypto users earned are very important.

Simple answer is they feel threaten. I don't blame them though because this industry has all it takes to overthrow them but if they were smart they should have realized by now that there's no stopping this technology. They should learn to embrace it and use it to their advantage. The blockchain technology is coming to make the banking industry more lucrative, transparent and less time consuming. All this the banks can use to their advantage instead of fighting an already lost battle. India isn't the only county trying this trick as my country has broadcast similar news months back on punishment to be given to users seen engaging themselves with bitcoin trading it investment.

With DeFi banking, when the hype dies down or gets overlooks and real development are made in thar sector,, the centralized banking system doesn't stand a chance of competing with it as lending has been made more easier, less time consuming and faster with DeFi. You don't need any guarantor to secure loans etc.

This really gives confusion to all crypto users in India for sure because of what are they experiencing and happening on their bank accounts. Yes, the RBI stated that crypto trading is not illegal but the cases reported are in relation to people who are used to be crypto users. It really looks contradicting in nature that how come your account is getting banned even without doing wrong thing. The banks are not doing anything wrong for it is said that they have the freedom to decide upon the situation. But they must at least do thorough investigation and not just mere allegation making bank accounts related to crypto being at freezed. They must at least inform the account owner of the matter before doing such thing so that there could be a clear out through negotiation. This whole thing is a big confusion for Indian crypto users which literally limits their actions with regards to crypto trading because of the fear of getting their bank accounts freezed.

India needs cryptocurrency regulation laws. Then banks will receive clear instructions on how to act in certain cases. While there are no such laws, banks will act at their own discretion and in accordance with the recommendations of higher banks. And banks do not like to experiment. Therefore, certain difficulties arise.
It should also be said that cryptocurrency has never been recognized as legal or illegal in India. Uncertainty on this issue still remains.