Last week, India’s central bank, the Reserve Bank of India (RBI), issued a statement that it had changed its stance on cryptocurrencies to “negative” from “neutral”, publicly acknowledging that it would not ban financial services for digital currencies. The bank had been working to understand the risks and benefits of virtual currencies since it first flagged the issue in April.
What a world! The Reserve Bank of India (RBI) has officially confirmed that banks do not have to quote their customers’ transaction histories any more. For what it’s worth, this is the first time that the RBI has confirmed the issue, which has been the subject of much debate in India. “The Reserve Bank of India has clarified in a release, that banks do not have to quote customers’ transaction histories for KYC (Know Your Customer) purposes.”
It seems that the country of India is not satisfied with Bitcoin. The Indian central bank banned banks from offering services to customers in relation to crypto-currency trading and now they have also asked all banks to stop quoting that ban as a complete fact.India’s central bank, the Reserve Bank of India (RBI), has officially informed banks that its banking ban circular is no longer valid as it was quashed by the country’s Supreme Court more than a year ago. Despite the Supreme Court ruling, banks quote the RBI circular when dealing with cryptocurrencies.
RBI orders banks to stop quoting its defunct circular on cryptocurrencies
India’s central bank, the Reserve Bank of India (RBI), on Monday issued a statement clarifying its stance on cryptocurrencies. The announcement, titled Customer Due Diligence for Transactions in Virtual Currencies (VC), is addressed to all commercial and cooperative banks, payment banks, small banks, NBFCs and payment system providers. RBI writes: We have learnt from the media that some banks/regulated entities are warning their customers against trading in virtual currencies, citing an RBI circular … dated 06. April 2018. An April circular informed banks that they were not allowed to trade cryptocurrencies. However, the Supreme Court of India overturned the circular in March this year and allowed banks to resume providing services to cryptocurrency companies, including cryptocurrency exchanges. In its statement on Monday, the RBI clarified this: These references to the said circular by the banks/regulators are not legitimate as the circular was issued by the Hon’ble Supreme Court on April 4. March 2020 quashed in Writ Petition (Civil) No. 528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India), it is stated: Therefore, in view of the judgment of the Supreme Court, the circular has since expired and therefore cannot be cited. The central bank added: However, banks, as well as the other entities mentioned above, may continue to implement customer due diligence procedures in accordance with the KYC, AML, CFT and PMLA obligations of regulated entities regulations of 2002, in addition to ensuring compliance with the relevant provisions of the Foreign Exchange Management Act (FEMA) for remittances sent abroad. Although the banking restrictions were lifted in March last year, some banks in India are reportedly still restricting cryptocurrency transactions. Some customers have reportedly received emails from their banks warning them not to use their bank accounts or credit cards for cryptocurrency transactions. Some media outlets even reported that the RBI had informally asked banks to cut ties with cryptocurrency companies and traders. However, the National Payments Corporation of India has said that it will not ban cryptocurrency transactions through UPI. Meanwhile, the Indian government is still working on regulating cryptocurrencies. It was intended that a bill on crypto currency would be introduced in parliament during the budget session, but that did not happen. Last month, the media reported that the government is considering setting up a panel to work on regulating cryptocurrencies. What do you think about the clarification of the RBI for banks regarding cryptocurrencies? Let us know your comments in the section below.
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Banking ban, bitcoin banks, cryptocurrency banks, bitcoin not banned, cryptocurrencies not banned, india, central bank of india, RBI, rbi ban, rbi circular, rbi not banned Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The Reserve Bank of India’s (RBI) press release of October 8th, 2018, was highly anticipated by the Indian cryptocurrency community. The RBI’s announcement was widely interpreted as an official ban on cryptocurrencies. However, the bank has since backtracked on its statement.. Read more about cryptocurrency ban in india latest news and let us know what you think.
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