The Reserve Bank of India (RBI), has issued a notice clarifying its position regarding cryptocurrencies. The notice officially advises banks that a circular, that prohibited banks in dealing with cryptocurrencies, is no longer valid. It was set aside by India’s Supreme Court in March 2020.
The notice cited media reports that certain banks/regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to an RBI circular– set aside more than a year ago – allowing banks to resume providing services to crypto businesses, including cryptocurrency exchanges.
Emphasising that the circular is no longer valid and that institutions can no longer cite it, the notice read:
“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 4, 2020 in the matter of Writ Petition.”
Official notification from @RBI about Crypto. Now tag your bank so that they will follow this.
Last time mostly banks said we don't have written information.
Like Retweet and tag your bank pic.twitter.com/fg0P6JbIhc
— Pushpendra Singh (@pushpendrakum) May 31, 2021
The RBI, however, added that banks and other regulated financial institutions should still carry out customer due diligence processes in line with regulations governing Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, 2002.
Feature image by Business Herald from flickr