A decision from the Reserve Bank of India (RBI) to remove a 2018 rule that prohibits banks from encouraging crypto dealings comes as a welcome relief for a community encountering opposition from traditional lenders required to help settle these trades.
Late on Monday, the regulator informed banks not to quote a 2018 central bank circular as a reason to obstruct cryptocurrency dealings. The 2018 circular had prohibited banks from carrying such deals, but since has been annulled by the Supreme Court.
The Reserve Bank of India told that the banks must continue with other routine due diligence actions on the trades. Continuing further, RBI told that the note isn’t valid from the date of Supreme Court’s judgement. Therefore, it can’t be quoted or cited.
The RBI order adheres to reports by local media that financial companies, including HDFC Bank Ltd., and SBI Cards & Payments Services Ltd. have warned clients against crypto trading. Indian authorities have shown their concern repeatedly that virtual assets could be used for criminal activities like funding terrorism and money laundering.
Avinash Shekhar, co-chief executive officer at India’s crypto exchange ZebPay told that investing in crypto has always been 100% legal in India. Also, the new circular from RBI clearly confirms the right to do business with cryptocurrency companies. Further, he said that the clarification will entice more investors to crypto.
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