Country Guides
14 min read · Last updated March 28, 2026 · BankToBTC Research
India's crypto banking environment is complex. The Reserve Bank of India's 2018 circular banning bank services to crypto exchanges was struck down by the Supreme Court in 2020, but informal pressure on payment processors continued until 2022. Today, IMPS and NEFT are the most reliable funding rails for Indian crypto exchanges, with UPI acceptance varying by exchange and bank. Users face a 30% flat tax on gains plus 1% TDS on every sale above thresholds.
The Reserve Bank of India (RBI) issued a circular in April 2018 directing banks to stop providing services to crypto businesses. The Supreme Court of India overturned this circular in March 2020 in the Internet and Mobile Association of India v. RBI case, ruling it violated constitutional rights to trade. Banks were no longer legally prohibited from servicing crypto exchanges.
Despite the court ruling, informal pressure on payment processors and UPI networks continued. In 2021–2022, several UPI apps including Google Pay, PhonePe, and Paytm stopped processing payments to crypto exchanges, citing RBI guidance. This was never formalised as a regulation, and UPI processing for some exchanges resumed from 2022 as the political environment evolved.
Since March 2023, cryptocurrency exchanges operating in India must register with the Financial Intelligence Unit India (FIU-IND) under the Prevention of Money Laundering Act (PMLA). Registration is mandatory for reporting obligations, KYC requirements, and suspicious transaction reporting. The FIU-IND issued notices and blocked access to several unregistered offshore exchanges including Binance, Kraken, OKX, and Huobi in January 2024.
The Finance Act 2022 introduced a 30% flat tax rate on virtual digital asset (VDA) gains with no benefit of the basic exemption limit, no loss set-off across VDA types, and no deduction for expenses other than cost of acquisition. This applies from FY 2022-23 onwards.
A 1% TDS (Tax Deducted at Source) applies under Section 194S on every sale or transfer of a VDA above ₹10,000 per transaction (₹50,000 per year for specified persons). TDS is deducted by the exchange at the point of sale and credited to the seller's PAN. Losses from crypto transactions cannot be offset against any other income or capital gains.
GST at 18% applies to the fee charged by exchanges on each transaction as a service fee. The underlying crypto asset itself is not subject to GST.
Indian bank Funding Scores reflect: IMPS support (the most reliable fast rail), NEFT support, UPI processing history for crypto exchanges, card compatibility, and any documented blocking or account closure history. All Indian banks technically permit IMPS and NEFT transfers to FIU-IND registered exchanges. The variation in score reflects reliability of UPI processing, card acceptance, and transaction limit flexibility.
| Bank | Funding Score | Best method | UPI for crypto |
|---|---|---|---|
| Bank of Baroda | 58/100 | IMPS / NEFT | Sometimes works |
| Axis Bank | 55/100 | IMPS | Restricted |
| BPER Banca | 55/100 | IMPS / NEFT | Limited |
| Kotak Mahindra | 46/100 | IMPS | Restricted |
| State Bank of India | 47/100 | IMPS / NEFT | Restricted (UPI blocked) |
| ICICI Bank | 47/100 | IMPS | Restricted |
| HDFC Bank | 42/100 | IMPS only | Blocked |
IMPS (Immediate Payment Service) is the most reliable rail for funding Indian crypto exchanges. It operates 24/7, settles in seconds, and is available via mobile banking, internet banking, or ATM. Fees are typically ₹2.50–₹25 per transaction. CoinDCX, WazirX, Mudrex, and Zebpay all accept IMPS deposits. Use IMPS as the primary rail.
NEFT (National Electronic Funds Transfer) settles in half-hourly batches, now operating 24/7. It is the standard rail for transfers that cannot be processed via IMPS. NEFT fees are similar to IMPS. NEFT is slightly slower but fully reliable for exchange deposits.
RTGS (Real Time Gross Settlement) is used for transactions of ₹2 lakh or above. It settles in real time but operates only during bank working hours. For large deposit amounts, RTGS is faster than NEFT.
UPI (Unified Payments Interface) acceptance at crypto exchanges varies. CoinDCX supports UPI; several others do not due to informal pressure from NPCI (National Payments Corporation of India). SBI UPI specifically has documented friction with crypto exchanges from a 2021 incident. HDFC Bank has blocked UPI payments to crypto exchanges at the bank level. IMPS is the safer default.
Bank of Baroda (58/100): The most reliable major Indian bank for crypto exchange deposits. BoB does not have a documented history of actively blocking crypto transfers. IMPS and NEFT work consistently. UPI sometimes works but is not guaranteed.
HDFC Bank (42/100): HDFC has blocked UPI payments to crypto exchanges at the bank level. Card transactions are also frequently declined. IMPS deposits work but expect occasional friction. HDFC is the most restrictive of the major private sector banks. Use IMPS only and avoid card purchases entirely.
SBI (47/100): SBI is the largest Indian bank by assets. IMPS and NEFT work consistently. SBI UPI has documented friction with crypto exchanges from a 2021 incident where SBI reportedly asked payment processors to disable SBI UPI for crypto. IMPS is the recommended method for SBI customers.
Kotak Mahindra (46/100): Kotak has documented crypto friction including 2019 account actions and a 2022 disruption with CoinSwitch. IMPS generally works but expect higher account monitoring. Use direct bank transfer via IMPS with the exact IFSC code and beneficiary details.
As of March 2026, FIU-IND registered exchanges include CoinDCX, WazirX, Mudrex, Unocoin, Zebpay, and several others. The FIU-IND register is available on the Financial Intelligence Unit website. Only use FIU-IND registered exchanges. The FIU-IND blocked access in India to Binance, Kraken, OKX, Kucoin, Huobi, Gate.io, Bittrex, Bitstamp, and MEXC in January 2024 for non-compliance. Using a blocked exchange may result in PMLA compliance issues.
Bank of Baroda is the most permissive major Indian bank for crypto exchange deposits. IMPS and NEFT work reliably. Axis Bank is also acceptable via IMPS. Avoid HDFC Bank for card payments as they are blocked.
UPI acceptance varies by exchange and bank. CoinDCX accepts UPI but not all banks process it. HDFC Bank and SBI have documented UPI friction with crypto exchanges. IMPS is the recommended alternative and works at all major exchanges.
30% flat tax on all VDA gains with no deductions (except cost of acquisition), plus 1% TDS on every sale above ₹10,000. GST at 18% applies to exchange fees. Losses cannot be offset against other income.
Yes. The Supreme Court overturned the RBI's banking ban in 2020. Crypto trading is legal but taxed at 30%. Exchanges must be FIU-IND registered under PMLA rules.
IMPS (Immediate Payment Service) is India's instant interbank transfer system. Log in to your exchange, select IMPS as the deposit method, copy the exchange's account number and IFSC code, and send from your bank's NEFT/IMPS section. Include the reference number exactly. Deposits settle within seconds.
DISCLAIMER
This guide is for informational purposes only and is not financial advice. Bank policies change; verify current terms with your bank and exchange. See our methodology for research standards.