SBI Bans Its UPI for Cryptocurrency Trading

The State Bank of India (SBI) has asked crypto trading platforms to diable the UPI of SBI from their interfaces. SBI has decided to take its route to clamp down on cryptocurrency proliferation in India.

SBI Followed By Several Other Banks in Stepping Back From Crypto Trading Platforms

Indian ministers and jurisdictions have been trying to fit cryptocurrency and digital currency in their economies. However, the central bank of India, that is the Reserve Bank of India (RBI) was always against the acceptance of cryptocurrency

Now, the financial institutions have been taking matters into their own hands. The largest lender of the country – the State Bank of India (SBI) has disabled its UPI on crypto trading and exchange platforms, from carrying out trade functions. 

The State Bank of India has in a sense, boycotted cryptocurrency. Traders and investors possessing an SBI account won’t be able to transfer funds to purchase cryptocurrencies or any other virtual currencies, and vice-versa.

In the past six months, several other banks have stopped their operations in the field of cryptocurrency and crypto exchanges. SBI came up with this decision following the steps of the central bank and other public banks.

In May, HDFC Bank warned investors and traders against using their accounts for transferring funds into crypto trading and exchange platforms, to purchase or sell cryptocurrencies, including Bitcoin. They also made the consequences of incompliance with their regulations clear. Anyone who failed to obey their orders will face “cancellation of their cards and restrictions of transactions.”

Indian Banks such as SBI, HDFC, ICIC are clamping down on cryptocurrency.

According to media reports, ICIC Bank has also eliminated its net banking services from these cryptocurrency exchange interfaces. 

It seems like, post the RBI’s malcontented regarding the proliferation of private cryptocurrency in India’s economy, banks have somehow formulated an unsaid status-quo.

The SBI spokesperson said, “It is the policy of the bank not to comment upon matters relating to the subject matter [cryptocurrency and crypto exchanges].”

Due to the withdrawal of services of several public banks, cryptocurrency communities in India are facing a setback. They are using e-wallets to transact and trade. However, the e-wallet fees and limitations are putting the investor enthusiasm off.

Recently reported that the governor of the Central Bank of India, Mr. Shaktikanta Das conveyed that the respective agency has “serious and major problems” regarding cryptocurrency. 

As per The Economic Times, WazirX chief executive Nischal Shetty said, “We’re trying to discuss and put forward our points to SBI. WazirX follows KYC (know your customer) norms and AML (anti-money laundering) policies. Being the largest crypto exchange in India, millions of Indians are currently affected due to this move by SBI.”

The financial bodies of India seem to revolt against India’s stance on crypto. The finance minister, Shri Nirmala Sitaraman gave hope to the Indian crypto communities that India might not put an umbrella ban on cryptocurrencies and try to adapt it with responsible regulations.

Also Read: Regulations Of Cryptocurrency In India Coming Soon