Relief for Crypto Investors as RBI gives clarification on bank warnings

Bob Coiney

June 1, 2021

After several scares and bad news, the cryptocurrency investment community in India breathed a sigh of relief as on Monday Reserve Bank Of India took a clear stand for cryptocurrencies. Recently, the Indian government released a warning for crypto-dealing clients, which resulted in lenders denying services to the clients. 

However, all the doubts were cleared when RBI mentioned that it had been brought to their attention via various media reports that banks have cautioned their customers to avoid dealing in cryptocurrencies. This advice was a result of a circular issued by the banking regulator on April 6, 2018.

RBI gave a statement mentioning, 

“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,” 

It added, “As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from,”

Due to the circular of 2018, several large public and private sector lenders have advised customers against dealing in digital currency and avoid using cryptocurrency exchanges such as WazirX.

WazirX, India’s Largest Cryptocurrency Exchange

WazirX, while the largest crypto exchange in India, has faced repeated issues in deposits and withdrawals of customer funds with their banking partner throughout the month. These troubles were confirmed by media outlets when they reported that HDFC Bank, State Bank of India, and others are warning their customers against dealings in cryptocurrencies as it can result in the suspension of their accounts. 

On the statement released by RBI, Nischal Shetty, Founder, and CEO of WazirX had some interesting thoughts, 

“This is a very positive development for the whole industry. There was a lot of confusion among banks about whether they can service their clients in the industry. This notification makes it clear,”

Shetty mentioned that they would be able to bring back all their banking services quickly after this statement. However, RBI did ask banks to carry out customer due diligence and KYC, Anti-Money Laundering, and other regulations to ensure complete compliance with relevant provisions.

It is an excellent win for the crypto community in India as they can now fearlessly invest in cryptocurrencies without worrying about any account suspensions.