Amid recent media reports of certain banks citing the 2018 crypto ban by the Reserve Bank of India (RBI) to caution their customers against dealing in virtual currencies such as Bitcoin, Ethereum, others, the Central bank on Monday told banks that they cannot refer to the old order that was quashed by the Supreme Court last year. In a notification to all commercial and co-operative banks, payment banks, small finance banks, NBFCs, as well as payment system providers, the Chief General Manager Shrimohan Yadav said, “Such references (by certain banks and regulated entities) to the 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.” He added, “As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from.”
“It’s great to finally see this clarification from RBI to all banks. There was confusion amongst banks and this notification clears it. Banks are now free to work with crypto exchanges,” Nischal Shetty, Founder and CEO, WazirX told Financial Express Online.
RBI, however, said that banks “may” continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002. This is apart from “ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”
To be updated…
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