Why did the Indian Crypto Exchanges Stop Instant Deposits and Withdrawals of INR?
Update1: Some Exchanges have re-enabled the deposits and withdrawals, however there is a fee of 2.36% levied for withdrawal on Exchanges like Koinex and Coindelta. It is actually a good thing in my opinion.
Update2: Coindelta has begun NEFT based withdrawal from Jan 2nd, 11:00 AM.
Update3: Coindelta has begun NEFT/IMPS based Deposits from Jan 5th 12:00 AM.
Almost all Indian Exchanges have temporarily halted INR deposits or withdrawals or both. We have discovered the reason why and it's absolutely ridiculous.
If you have an account in any Cryptocurrency exchange in India that supports Instant Deposit and Withdrawal of INR, you would have received the shocking news in email or any other form of notification. Mainly there are 3 exchanges which allows instant deposits - Zebpay, Koinex and Coindelta. The latter two also allow instant withdrawals.
These are the notifications:
Koinex gave the most subtle of the notifications by pinning one on their website. It says the INR withdrawals will remain shut for nearly 2 whole days.
This is the notification on Koinex's website
CD decided to notify its users with a mail. They have disabled the instant deposits for now. The withdrawals are being processed manually.
The email received by Coindelta Users
India's Bitcoin flag-bearer has decided to disable instant deposits from both their instant deposits accounts - Express 1 and Express 2. They sent this email to the users.
The email notification from Zebpay
Why did this happen?
While there are a lot of speculations including someone's bizarre claim of a hack, we figured out the reason why.
The shortest possible answer is - Blame the Banks.
These 2 giants handle all payments and withdrawals between the major exchanges in India including Zebpay, Koinex and Coindelta whose users are the most affected currently.
The banks of India, our dear country, have instructed these companies to stop transferring funds for the purpose of trading in cryptocurrency. Yes. This is the reason.
And here is the proof:
An email from Throughbit, that clearly mentions how the banks have stopped the services for us
The above email from Throughbit clearly mentions "banks asking our 'payment gateway' providers to stop services to cryptocurrency businesses".
On one hand banks like ICICI are entering into the Blockchain ecosystem for innovation, while on the other hand they are hindering the trade of the very by product of the technology.
This is an infographic from May 2017 and they partnered with Emirates NBD almost half a year back.
The reason behind this decision is yet to be known unfortunately. This is the current situation and we have to wait for the tide to turn.
How do we deposit INR to Exchanges for trading?
There is one other way to still keep depositing INR to your favourite exchanges and continue trading.
Payment gateways are available on Koinex, Coindelta and Zebpay. The payment gateway limit is set to INR 50000/- for Koinex and Zebpay while it is INR 100,000/- for Coindelta. You have to pay a fee of 2% for the service. If you are an avid trader, 2% should not bother you. However it still is expensive than the free service we received with Instant deposits.
Note: HDFC and ICICI banks have declined net-banking support to Razorpay, hence the payment gateway option will not work for you. However, you are free to use wallets like Mobikwik and Freecharge for the same.
Wait. We wait till the exchanges figure out a way to bring back quick deposits.
What can I do to help?
We need to fight this atrocity and monopoly of the banks together. I found this petition on Change.org to make Bitcoin legal. Let's all sign it and make that happen. This is the least we can do.
Also, let's give the exchanges a chance to recover from the shock. Stop blaming and abusing exchanges for these temporary halts. It is not their fault. I hope you understand that by now and will be more considerate towards them.