Almost one million customers of an Indian bank are currently without access to the money they deposited with the institution. The incident serves as yet another reminder of the shortcomings of the current banking system and the potential improvements offered by crypto.
The bank in question has been under investigation for fraud and Mumbai police have arrested several of its executives. Customers have been only allowed to withdraw a maximum of $700 from accounts and many fear losing their life savings.
Indian Bank Fraud Highlights Advantages of Crypto
As reported by the BBC, protests over the harsh withdrawal limits imposed by India’s Punjab and Maharashtra Co-operative Bank have been going on for weeks now. The bank is suspected of fraud amounting to $600 million. Police arrested senior members of the institution in Mumbai, the financial heart of India, last month.
PMC #Bank: Indian customers protest after #fraud investigation launched. Nearly a million angry customers of #India's Punjab and Maharashtra Co-operative bank are panicking as they struggle to access their money. https://t.co/708JTmDQVI
— Carles Dijous (AAlb) (@carlesdijous) November 12, 2019
Since the arrests, restrictive withdrawal limits have been placed on bank customers. Customers have been only permitted to take out $700 of their own money. Many of those impacted say they fear losing everything they deposited at the bank.
The BBC published a video from the scene of the protests. Interviews with individuals impacted tell tales of heartbreak and injustice. One 77-year-old man told reporters that his entire life savings were in the bank. Meanwhile, another man spoke about how the fear of losing everything had impacted several more vulnerable individuals:
“Six people have lost their lives – one suicide and five people out of a heart attack. How long is our government going to really keep quiet?”
For the most part, people take banks for granted. Questions only arise about the amount of control they have over their users when something goes wrong. After all, a bank needs to grant permission to a customer for them to setup an account, deposit, transfer, or withdraw their own money. Of course, they usually do. However, in times of crisis, banks have a habit of being less forthcoming with customer funds. Crypto assets, meanwhile, do not require any such permissions.
With innovation in financial technology accelerating at a blistering pace, in part thanks to Bitcoin and crypto, such permissioned banking systems begin to look more authoritarian by the day. Whereas once it was difficult to conceive of a financial system not dependent on some trusted intermediary, cryptocurrency has opened the eyes of its still small user base to an alternative path. With incidents of banks exerting such control over users commonplace around the world, it is not hard to imagine this user base continuing to grow.
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