Last Updated: 3 June 2021
A year ago, the Supreme Court of India lifted the banking ban associated with crypto dealing. However, some banks are still not allowing their customers to deal in Cryptocurrency quoting from the previous decision of the Supreme Court of India. Indian central bank, the Reserve Bank of India, has confirmed that no longer any bank in India can deal in digital currency.
RBI Latest Statement
On Monday, the Reserve Bank of India (RBI) issued a notice clarifying its status regarding Cryptocurrency. The statement’s title was “Customer Due Diligence for Transaction in Virtual Currency”, and it was directed to all commercial and cooperative banks, payments banks, small finance, NBFCs, and payment system providers. In the notice, RBI stated that through media and authorities, they have noticed that many banks are not providing cryptocurrency-related services to their customers by referencing the circular issued on April 06, 2018.
This April circular prevented banks from dealing in Cryptocurrency. But in March 2020, the Supreme Court of India allowed banks to resume their activities associated with Cryptocurrency and provide services to the customers, including cryptocurrency exchanges. RBI also stated that the banks referring to the old crypto banking ban are no longer valid now. On March 04, 2020, the Supreme Court lifted this ban in the matter of Writ. Petition Civil no.528 of 2018 (Internet and Mobile Association of India vs Reserve Banks of India). No bank can quote from the previous judgment of the Supreme Court because from the date the new judgment is passed; the old one became invalid.
The banks should start offering services to their customers by following government rules and regulations, including Know Your Customer, Anti-Money Laundering, Combating of Financing of Terrorism, and Foreign Exchange Management Act. Banks should follow all these rules and regulations to prevent money laundering and other financial crimes.
Some banks have complained recently that their banks are not allowing them to use credit cards or bank accounts for dealing in Cryptocurrency. These complaints were received after the Supreme Court of India lifted the cryptocurrency ban.
Cryptocurrency Future in India
Indian Government is working on setting up crypto-related rules and regulations in the country. Last month, it was expected that a crypto bill was supposed to be introduced in Parliament in the budget session, but it wasn’t. The media reports indicated that the Government is planning to set up a panel of experts to formulate cryptocurrency rules and regulations.
Regardless of the current market status of Cryptocurrency, it is safe to say that digital currency is making its way in various parts of the world. The rising popularity of Cryptocurrency is proof that it has the potential to go up. However, the current situation of the market brought different views of the experts into notice. Some experts say that this is the end of Cryptocurrency. In contrast, others are optimistic about it and saying that this time of the market is the golden opportunity for the investors to buy more cryptocurrency tokens for cheap and then take advantage of the upcoming boost.