Reserve Bank of India proved to be a blessing in disguise for the Indian crypto market by issuing an official notice on Monday concerning that local banks are reportedly warning clients against adopting cryptocurrencies.
The RBI said that it had been brought to their notice by a few media reports that banks have forewarned their clients from managing digital currencies by referencing a circular issued by the banking regulator on April 6, 2018. And in response RBI further added,
Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India).
RBI cleared that in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from.
The explanation came after leading banks in India, HDFC Bank advised their clients through emails against trading in cryptocurrency such as bitcoin, citing the circular.
RBI previously urged banks to stay away from companies trading in cryptocurrencies. ICICI Bank, Yes Bank, and Paytm Payments Bank are amongst the leading names to sever ties with the sector.
In Monday’s announcement, RBI has asked lending institutions to continue to carry out customer due to diligence processes in line with regulations governing standards for know your customer, anti-money laundering, combating of financing of terrorism, and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.
New to Crypto? Enroll in Cryptocurrency Course at Todayq Education.