After receiving multiple criticisms from mainstream media and the public, RBI seems taking a U-turn on the matter by saying it’s not restricting banks or any regulated entities from dealing with cryptocurrency.
In a recent circular released by RBI (Reserve Bank of India), it has completely denied its role in any such activity that may have imposed a ban on banks or other financial institutions in dealing with cryptocurrencies or related businesses. RBI said that banks are citing its old circular DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018, and it’s not valid anymore because it has been set aside by the Hon’ble Supreme Court.
Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020, in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India). As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from.Shrimohan Yadav, Chief General Manager, RBI
From the start of the year, cryptocurrency exchanges are facing trouble working in India due to continuous backout from banks and other financial institutions. Most banks and payment providers have pulled out support leaving exchanges and its user in the middle of chaos to deposit and withdraw funds.
This matter became more heated when the news broke out that RBI is bullying banks from behind and forcing them to cut ties with crypto exchanges and restrict users from using card and bank accounts for crypto transactions. Some banks even sent a formal email notification to its customer stating not to use accounts or cards for crypto transactions or it will be suspended. We still don’t know the entire truth yet but RBI seems to keep its distance from the matter for now and hence released a circular denying its involvement in the matter.
You can read the entire official circular below –