HDFC Bank Discontinues Card Services to Buy or Trade in Cryptocurrencies

HDFC Bank Ltd, one of India's largest private sector lenders, has sent an official email to all its customers informing the discontinuation of the use of cards for purchase or trading of virtual currencies.

The email said, "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 decision comes after the Reserve Bank of India's various warnings on the risks associated with cryptocurrencies. The email stated "increasing global apprehensions" and RBI cautions regarding "potential economic, operational, legal and security related risks" with such transactions.

Earlier this year, banks had reportedly stopped or delayed processing deposits and withdrawals in dedicated bitcoin exchanges. Just a month ago, Citi Bank and JP Morgan sent a similar email to all its customers informing the discontinuation of card services to buy or trade in cryptocurrencies.

Citi Bank Won't Allow Use of Its Cards for Cryptocurrency Purchase

In his budget speech, Finance Minister Arun Jaitley said, "Government does not consider crypto-currencies legal tender or coins and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system."