HDFC India, a commercial bank, has said in its report that access to crypto will soon be available to Indian investors but at a particular time.
HDFC is one of the biggest commercial banks operating in India. To date, the bank has 5,608 branches throughout India with 16,087 ATM machines installed therein. HDFC was also the pioneer bank in India that was officially allowed in 1994 to establish a purely private financial institution. The approval was duly granted to NDFC by the Reserve Bank of India, which is the Indian central bank.
HDFC has recently issued a report which it had compiled immediately after the bank had scrutinized customers’ accounts for examining any crypto transactions.
The report has been issued under the heading “Crypto: Fad or Forever” in which the bank had discussed the crypto future in India. In the report, HDFC noted that there are conflicting characteristics within digital assets which the bank has to reconcile yet. HDFC appreciated that when recently the global financial system unorthodox movements in traditional assets, then crypto provided a shield against such movements. However, it is the opinion of the majority of HDFC’s economists that still crypto has major issues such as “volatility”.
However, HDFC noted further that the good thing is that the central banks of the world are joining the crypto arena. In addition because of digital assets’ diverse characteristics and their limited supply, this is an area that needs to be observed carefully. It was stated by the bank that hopefully, the Indian investors would soon be able to enjoy access to crypto. This time the access will be duly “legalized” and allow the crypto industry to merge within the financial industry.
The report also highlighted that globally, crypto investment remained the best investment vehicle during 2020.
However, the bank did not give a clear picture as to what is meant by “legal access”. It is abundantly clear that neither cryptocurrency is banned in India nor investors have been debarred from investing in them. The only issue is with the Government’s few policies which relate to taxing crypto and submission of information of crypto ownership. Even the Government of India has clearly informed publicly that they are not going to ban crypto at all. But the majority of crypto community members in India assume that crypto legislation is in fact going to ban crypto trading in India.
HDFC compiled the crypto report when it received complaints from its customers. The customers claimed that they were informed through letters sent by HDFC that they cannot conduct any crypto transactions. However, the bank clarified to its customers that the letters were sent in compliance with the directions of the central bank issued in 2018.
The April 2018 directives were in fact set aside by the Indian apex Court in 2019 and the Court also restored crypto trading.
Later on, the Reserve Bank of India also clarified that no bank is required to quote the April 2018 directives.