What to do if your bank account is shut because of cryptocurrency transactions?

Post the April 6th RBI circular,  a lot of banks have sent out official communication to their users that their bank accounts will be shut if they conduct cryptocurrency transactions. Amidst this uncertain regulatory climate, there is a lot of confusion around the steps users can take in such a scenario. In an interesting article, Crypto Kanoon lawyer Danish Ahmed has spoken about the legal remedies users can take in case their banks decide to shut down their banking accounts owing to cryptocurrency transactions.

Danish states that banks have full authority to shut down user accounts if thy feel that these are being used for cryptocurrency transactions. In such a scenario, end users have three options in front of them:

  1. File a complaint with the nodal officer.
  2. File a complaint with the banking ombudsman
  3. As a last resort, users can also approach the consumer court.

The article also states that banks cannot determine the nature of the transactions and speculate whether the accounts are being used for cryptocurrency transactions. Banks can only identify cryptocurrency transactions if a user has specified it through remarks such as Bitcoin and cryptocurrency in their transactions. In addition, banks cannot take away the users’ money in any such scenario and the money kept in the bank account is completely safe.