Reserve Bank of India Confirms No Banking Ban for Crypto companies in India


As a response to the RTI query filed by
Indian Crypto exchange Unocoin’s Co-founder B V Harish, India’s central bank -
the Reserve Bank of India has cleared that it does not prohibit banks to offer
their services to the crypto exchanges, crypto firms or trading account
holders.
The RTI query was filed on 25 April 2020
almost one month following the decision of the Supreme Court of India to
legalize the use of cryptocurrencies.
In the RTI query, B V Harish had sought the
explanation from the RBI if it has prohibited any banks from providing the bank
accounts for crypto exchanges, companies, or crypto traders.
In response, the RBI stated on May 22:
“As
on date no such prohibition exists”
Following is the part of the RBI’s reply to
B V Harish
RBIND/R/E/20/02095
Sr. No |
Information
Sought |
Reply from RBI |
1 |
Is the RBI prohibited any banks from providing the
bank accounts for crypto exchanges, companies or crypto traders. |
As on date no such prohibition exists. |
Why the Right to Information (RTI) query
was filed?
Back in April 2018, The RBI had released a
circular ordering the Indian banks to not to deal with the crypto industry.
This circular was challenged by the crypto community in India through several
lawsuits in Supreme Court. After almost 2 years of legal battle in March 2020,
The Supreme Court of India quashed the RBI ban and allowed the banks to provide
services to the crypto industry in India.
Even after the verdict, the RBI had not
released clear guidelines to the banks about dealing with the crypto companies.
Subsequently, several banks were declining to deal with the crypto-related
firms.
To clear this uncertainty and ambiguity, B
V Harish had thus sought RTI query to the RBI to clear its stand on the
prohibition.
The Current Status of Crypto Industry in
India
Amid the Corona Crisis, the Indian economy
which was already in abysmal is in deep shambles but the crypto industry in
India is following the worldwide trend of boom in here as well.
New exchanges are launching, investments
are pouring in, users are growing and overall a positive wave can be witnessed amid
the economic crisis.
Disclaimer
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Jayashree Ingle
CBW - External Analyst
INDIA
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