Indian Banking Giant ICICI Restricts Customers from Using Remittance for Crypto Investments

Since the inception of Bitcoin (BTC), India’s attitude on cryptocurrency adoption has been a grey area. In what appears to be yet another setback for the Indian crypto community, one of the country’s largest financial institutions, ICICI Bank, has issued a warning to customers not to use its remittance services to invest in any kind of cryptocurrency.

Indian Banks Continue to Trouble Crypto Enthusiasts

The Economic Times reported recently reported that the bank has recently modified the “Retail Outward Remittance Application” form to include a declaration that “remittance is NOT for investment/purchase of Bitcoin/cryptocurrencies/virtual currencies (such as XRP, ETH, LTC, DASH, DOGE, PPC, NEO, NXT, or any other virtual currency/cryptocurrency/Bitcoin).”

In addition, customers who wish to send money overseas through the Reserve Bank of India’s (RBI) liberalized remittance scheme must now sign a declaration that restricts them from investing in “units of mutual funds/shares or any other capital instrument of a company dealing in bitcoins/cryptocurrency/virtual currencies.”

Additionally, the updated form requests a declaration that the money being sent has not been redeemed from crypto assets. The shift comes several weeks after major Indian lenders halted banking services to local cryptocurrency exchanges, essentially shutting out traders from accessing international markets through traditional banking channels.

Investors Remain Confused

ICICI’s decision to go after financial institutions by using FEMA 1999 is consistent with other banks in the nation after the RBI made the announcement in April 2018 that banned financial institutions that conduct business with crypto-related businesses.

Meanwhile, the Supreme Court of India has contradicted the RBI’s ban on crypto-friendly banks. On May 31, the RBI stated that lenders cannot use the now-invalid crypto banking prohibition enacted in April 2018 to deny services to cryptocurrency exchanges and dealers.

Despite this, a number of lenders have suspended net banking services for merchants engaged in cryptocurrency transactions. As a result of this confusion, India’s crypto investors continue to find loopholes in the system to grow their crypto portfolio.

On the other hand, the finance minister of India has recently presented an update on the country’s cryptocurrency bill, which the government has been working on. Reportedly, the Cabinet note is ready and the bill is set to be up for debate in the upcoming parliamentary session.