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Central Bank of India clarifies regulations as local banks shun crypto

The Reserve Bank of India, the country’s central bank, released a new directive today after local banks ceased crypto services for users citing a directive from 2018, an official filing shows.

“It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 06, 2018,” the bank stated.

“Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Honorable Supreme Court on March 4, 2020 in the matter of Writ Petition,” the notice reads, emphasizing that the circular is no longer valid and cannot be cited.

However, banks and other regulated financial institutions can still carry out customer due diligence processes related to Anti-Money Laundering and Know Your Customer standards under the Prevention of Money Laundering Act of 2002, the RBI noted.

The RBI’s statement comes in response to media reports claiming that some of India’s largest banks, like HDFC Bank and the State Bank of India, have cautioned their customers against dealing in digital currencies. Some users claimed that HDFC Bank cited the RBI’s 2018 order banning crypto trading in India. The ban was officially overturned in March 2020 by the Supreme Court of India.

The news adds to the prevailing uncertainty regarding the legal status of crypto in India. Earlier this year, anonymous sources claimed that the government was planning a blanket ban on crypto.

Source: Cointelegraph