Kotak Bank has temporarily halted payments to and from their exchange partner CoinSwitch Kuber. While no formal announcement has been made regarding the suspension of financial services for crypto exchanges, the current regulatory environment has urged caution. After payment service provider MobiKwik’s decision to cut links with all bitcoin exchanges in April, Kotak Bank has decided to be cautious. MobiKwik was one of the few financial service providers that had still partnered with various crypto exchanges in India.

While Indian financial institutions have long been hesitant to invest heavily in crypto exchange partnerships, an ill-advised comment made by Coinbase at their India launch on April 7 drew the first direct rebuke from an Indian authority since Finance Minister Nirmala Sitharaman announced new crypto regulations in February. At their launch, Coinbase mentioned that they would be using UPI to help conduct fiat-to-crypto trades on their platform. However, within hours, the National Payments Corporation of India (NPCI), which controls the UPI platform, issued a statement saying that they were not aware of any crypto exchange in India using the service.