Cashaa, a UK-based cryptocurrency bank has announced the setting up of a subsidiary (Unicas) in India to offer crypto-based banking services for customers in India. The bank has announced a tie-up with a credit cooperative society to allow customers to access services for digital currencies as well as fiat currencies. The corporate entity Unicas Services LLP was set up in July 2020.
The development comes when several banks are cutting relations with crypto businesses amid regulatory uncertainty. RBI governor recently said that the central bank has conveyed its concerns to the government which is working on a bill to regulate crypto assets.
Cashaa JV partner, the United Multistate Credit Co-operative Society Limited (“UMCCSL”) is registered under “The Multistate Co-operative Society Act- 2002” vide registration no. MSCS/CR/479/2012. These societies are formed to provide financial support to the members. The society accepts deposits from members and grants them loans but cannot lend to the general public who are not its members. These societies are not under the direct regulatory purview of RBI.
“As we give services to members only, we do not need the RBI’s permission for this model. United is also a member of the National Federation of Urban Co-operative Banks and Credit Societies Ltd (NAFCUB) vide membership No. 1753 and certified with ISO 9001:2008 for Quality Management Systems,” Cashaa Founder and CEO Kumar Gaurav was quoted by The Indian Express.
Although the bank is expected to open for service around Independence Day, our CryptoVakil team was able to create a user account and access the user dashboard at the time of writing this. Customers are required to pay a membership fee of INR 110/- for opening a savings account. The bank offers a 4% interest rate for INR and major crypto deposits. The bank also has an in-house coin Cashaa and offers an additional interest rate of 2% if customers choose to receive interest in Cashaa. Accordingly to terms and conditions available on the website, the service is offered by UMSCCL in the capacity of an intermediary.
NAFCUB, an apex promotional body of urban cooperative banks and credit societies, as per a report on Businesstoday, said credit societies need prior approval of authorities before offering any crypto assets to their members. “They (United Multi-State) have not renewed the members for the last 5-6 years. They are also not even interested in renewing or continuing the membership,” says Ramesh Mantri, a board member of NAFCUB. “I sense something wrong or illegal,” warned Mantri.