On Monday, The RBI clarified that banks and other entities could not cite its April 2018 order on virtual currencies. It all put aside by the supreme court of India in 2020. The Circular issued addressed all commercial and cooperative banks, payment banks, small finance banks, NBFCS, and payment system providers.
The central bank’s clarification came with relief for all investors and crypto exchanges in India who invested in cryptocurrencies.
“Such reference the above circular by bank regulated entities are not in order as this circular was set aside by the Hon’ble supreme court on March 4, 2020, in matter Writ petition civil No. 528 of 2018 (Internet and Mobile Association of India v. Reserve bank of India),” the RBI said.
The RBI bank further added, “Bank, as well as other entities, may, however, continue to carry our customers due diligence process in line with regulation, governing standards for know your customers (KYC), Anti-Money laundering (AML), Combating of Financing of Terrorism (CFT) and Obligation of regulated entities under PMLA, 2002 in addition to ensuring compliance with relevant provision under Foreign Exchange Management Act (FEMA) for overseas remittances.”
Earlier HDFC Bank and SBI bank have cautioned their customer-related dealing in virtual currencies such as Bitcoin and sent the email.
RBI commented on Cryptocurrencies amid their increasing popularity in its booklet on payment system issued in January 2021. It said, “The regulators and government have been sceptional about these currencies and are apprehensive about associated risks.”
