HDFC Bank bans customers from buying cryptocurrencies via its credit, debit cards

HDFC Bank has disallowed its customers from buying Bitcoins, cryptocurrencies and virtual currencies through the bank's credit, debit and prepaid cards.

In a circular to the HDFC Bank customers, it said: "You may be aware of the increasing global apprehensions regarding Bitcoins, cryptocurrencies and virtual currencies. The Reserve Bank of India has also cautioned the public regarding the potential economic, operational, legal and security related risks associated in dealing with such currencies."

"To ensure our customer's security, we have decided to not permit usage of HDFC Bank Credit, Debit and Prepaid Cards towards purchase or trading of such Bitcoins, cryptocurrencies and virtual currencies, on merchants suspected to be dealing in crypto-currency or online foreign exchange trading or both," the circular added.

Earlier in mid-February, Citi Bank had banned its customers from buying cryptocurrencies using credit and debit cards.

It said in an email circular: "Given concerns, both globally and locally including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with bitcoins, cryptocurrencies and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies." 

According to a Mint report, people have been in a dilemma over whether or not to buy cryptocurrencies ever since the price of bitcoins skyrocketed from a little under $1,000 in 2016 to touch nearly $20,000 in 2017.

The Indian government too, hasn’t been in favor of cryptocurrencies. While announcing the Union Budget 2017, Finance Minister Arun Jaitley said that the government will take steps to eliminate use of cryptocurrencies, which he said, are being used to fund illegitimate transactions or as part of the payment system.

"Cryptocurrencies are not legal tender and the government discourages its use. However, the government will look at the utilisation of Blockchain (a distributed digital technology that supports cryptocurrencies)," Jaitley said in his Budget speech in Parliament.