India’s largest private bank is stopping customers from being able to use funds for crypto investments abroad using a remittance scheme, according to a change in its application form.
India’s largest private bank, ICICI, has seemingly changed its Liberalised Remittance Scheme (LRS) to disallow payments that involve cryptocurrencies. This would prevent Indian citizens from being able to use cryptocurrency exchanges that are abroad.
This LRS scheme is typically used by families to send money to their children abroad. However, some Indian investors have been using it to invest in crypto abroad, something which the bank has caught wind of. This is the kind of broad approach that Indian banks are taking to ensure that they can limit transactions in an unregulated field.
Under the declaration section, the bank asks that the customer admit that the exchange is not for “investment/purchase of bitcoin/cryptocurrencies/virtual currencies.” It also mentions other specific assets, including Ethereum, XRP, Litecoin, Dash, Peercoin, Dogecoin, Primecoin, and VeChain.
Furthermore, it says that the funds should not be for “investment in units of mutual funds/shares or any other capital instrument of a company dealing in bitcoins/Cryptocurrency/Virtual Currencies.” Lastly, it asks that the source of funds for the remittance is not from profits relating to the crypto market. This is a very strict imposition and one that is likely to upset Indian investors, who are finding it hard to liquidate their holdings.
Where does India stand on crypto?
Insiders and analysts believe that this change will further slow down investment in the Indian market. While the Indian public is keen on crypto assets, there has been a slowdown since banks stopped facilitating transactions related to crypto.
Investors have been keen on clarity more than anything, as it would give them some information on how the market is poised. What will be key is the government’s official statement on the market. So far, it has flip-flopped between positions, and the latest rumors appear to indicate regulation as opposed to outlawing.
This is a big shift from previous positions, which included a hard ban. Supporters have argued about the advantages and innovation that the market can bring and the fact that India cannot afford to lag behind. These are among the biggest arguments posed to the government, who do not entirely dismiss it.
The government is likely to discuss its official stance on the crypto market in the ‘Monsoon’ session of the country’s parliament. Generally speaking, recent reports are just as ambivalent on the future state of crypto in India. The country’s Finance Minister said that it wasn’t closing its mind, but some rumors are swirling that it may be the world’s strictest policy on crypto.