Recently HDFC Bank , one of the largest private banks of India, banned crypt currency purchase using its cards in India. Does it impact you or in general the crypt enthusiasts of India ?
This was not new. Earlier, similar measure was taken by Citibank. And all these after repeated warnings from the Reserve Bank of India, the Central bank that regulates all the banking norms in the country. I will not be surprised to see few more private banks join this trend. However, what I am surprised is that all these banks convey the message that they are doing this to protect the Customer !!!
Do the private banks ever protect the customer ? Based on my experience, if you owe them some money, they will take every route to recover it from you, even to the extent of adopting illegal practices. Unless you die, there is no way that they will not recover their debt from you, to the fullest possibility. So what are they baking here ?
The gist is usage of the Cards. So when you use their cards to purchase crypt, there is another area, that can defend the consumer, the card fraud. So when you report a fraud with a card, it takes usually a lot of amount of time to investigate and until the investigation is complete and you agree to that, they cannot recover the amount from you. So one can fight with these banks not paying the due, and instead reporting a fraud.
So they want to protect themselves from such possibility. The funny part is that the RBI is repeatedly giving warnings, but business is as usual with the major crypt exchanges like ZebPay, Unocoin, CoinSecure etc. And for you to buy crypt in these exchanges, you don't need a Card. They have their own accounts to which you can transfer the funds from your account and then buy there.
So can the Central Bank not shut down these, if it is really concerned about the crypt ? NO, because the government also does not want to loose tax. Few months back, the Income Tax department raided these exchanges, which hit the headlines. Purpose was to find out who benefited from the crypt and whether they paid tax or not. The tax on gains from crypt is considerable as its treated as Capital Gains Tax.
So they want the benefit , but they also want to play safe, should there be any issues in Public. If something happens, they can do a press conference and convey the message : We told you.... And then set up a commission of inquiry which never ends.
While people like Vijai Mallya and Nirav Modi could cheat to the tunes of thousand of crores while living a posh life here, Why did the government or the Income Tax department wake up and keep an eye on them ? And all these happened with PSUs, which are directly monitored by the Central Bank. Because there is a very good saying :