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RBI Asks Banks to Stop Quoting Its ‘No Longer Valid’ Circular on Crypto

RBI Asks Banks to Stop Quoting Its ‘No Longer Valid’ Circular on Crypto
  • RBI has advised banks to stop mentioning its “no longer valid” crypto ban quote.
  • Some banks still restrict users on crypto transactions.

The Reserve Bank of India (RBI) has asked to stop mentioning its circular crypto ban is “no longer valid”. According to the RBI, India’s Supreme Court lifted their crypto ban over a year ago.

The RBI issued a report on Monday clarifying its status regarding cryptos. The report, called “Customer Due Diligence for Transactions in Virtual Currencies (VC).” Also, it points to commercial and cooperative banks, payments banks, NBFCs, small finance banks, and payment system providers.

The RBI wrote,

As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from.

Of note, despite the Supreme Court’s decision, RBI says that banks continue to quote its ban when it comes to crypto. For this reason, the RBI has advised banks to avoid quoting it’s “no longer valid” ban whenever they are dealing with crypto.

Further, RBI also said that Banks and other entities addressed above may continue to carry out customer due diligence processes. Besides, it will be in line with regulations governing standards. Also, the obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002.

This ensures compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.

Despite the Supreme Court lifting the ban, many Indian banks still restrict users on possible digital asset transactions.

Furthermore, customers reportedly received crypto warning emails from their banks. The emails say that they should avoid using their bank account or debit cards for crypto-related activities. Meanwhile, the Indian government is still on crypto regulation.  

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Collins Adane is a writer who follows the crypto industry closely. He loves fish stew and Real Madrid. He believes in cryptocurrency’s potential to transform the money landscape in his native country Ghana.