As per a report published in Economic Times, Kotak, India’s leading private bank, has reportedly become the first to open its gates to the crypto community. The banking giant announced it has partnered with the leading crypto exchange WazirX, which would allow traders to use the banking services to liquidate their funds. The partnership between the two parties is being seen as a major breakthrough for the Indian crypto community.
Banks in India still hesitate to conduct business with crypto companies.
The partnership between Kotak bank and WazirX is a breakthrough for the crypto community, given Indian banks have frozen crypto payments and withdrawals for the past eight months. Most Indian banks still hesitate to deal with crypto exchanges. “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,” said one of the people familiar with the matter, the news report stated.
There is still a lack of regulatory clarity on cryptocurrencies.
Private banks in India have refused to do business with crypto exchanges, citing a lack of clarity on regulations, and were often found using non-valid circulars from the Reserve Bank of India (RBI) to deny services. The RBI circular in question dates back to 2018, when the Indian Central Bank ordered banks to avoid offering their services. The circular was later ruled unconstitutional by the Supreme Court in March 2020, clearing banks to offer their services. However, it had little to no impact on Banks’ actual behavior.