ICICI Bank cuts its ties with crypto currency exchanges

ICICI has instructed payment gateways (intermediaries between a bank and exchange) to shut off net banking for merchants/exchange who are involved in buying or selling of cryptocurrencies directly or indirectly. With this, ICICI Bank’s online services cannot be used to deal with any cryptocurrency exchange. Sources say that this may be an implication of RBI's notification banning use of cryptocurrencies in financial and other institutions, back in 2018.

Few questions to ponder upon are as follows:

Could other banks follow similar approach? - ICICI is one of the leading private sector bank which is one of the market leaders. It is likely that other bank may follow similar approach.
Why is ICICI bank reacting to the notification now? or does it have anything to with the current discussion of ban on cryptocurrencies? - ICICI bank's reaction to RBI notification that came 2 years back does sound very funny. However, it is more likely that the current discussion in the parliament on ban on cryptocurrencies is leading to this reaction
What is the way out for ICICI account holders currently who want to buy/sell crypto? - Currently these account holders will have to route this through other bank accounts.
What if all banks follow suit with ICICI? - This is a very complicated situation. In such case, one of the options to withdraw money is to find a financial service provider/forex broker (Eg. OctaFX) outside India that accepts cryptocurrency as payments and then withdraw from such service provider/broker into a bank account. For deposit of funds into an exchange, one can use paypal, stripe, etc if supported, or use a financial service provider (like OctaFx) to route the money. Also, one can consider the option of carrying out the crypto activities through payoneer. An extreme option is to liquidate all of the crypto holdings at the earliest as soon as 4-5 banks follow suit and withdraw all of the money to a bank that hasn't banned such transactions yet, before that bank follows suit too.
Is there a likelihood of ICICI reversing this decision? - Yes, if the government comes up with favorable regulations for crypto rather than banning all crypto, it is likely that ICICI would reverse its decision. Further, even in a scenario that the exchange owners are able to convince the banks, it could still help in resolving this issues earlier.

You can read the full news on: https://economictimes.indiatimes.com/news/economy/finance/lack-of-clarity-icici-shuts-out-crypto-trades/articleshow/82337734.cms

PS: Kindly do not treat the above advice as legal/financial advice and please undertake your own diligence before following any of the above steps.

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