RBI has now clarified the warning from banks to people dealing in cryptocurrencies. RBI said that it came to its notice that banks have warned the customers from dealing in cryptocurrencies saying that it can lead to suspension of their account. This was in reference to the circular that was issued by the banking regulator on 6 April 2018. However, on May 31, 2021, RBI clarifies the warning from banks to customers not allowing customers to buy and sell cryptocurrencies.
RBI said that the citations to the circular by the banks are not in order. It is because the Honorable Supreme Court set aside the circular on 4 March 2020. RBI added to its statement, that the circular is not valid since the judgment of the Honorable Supreme Court, and banking sectors cannot deny dealings in cryptocurrencies based on the circular.
It has been reported that banks including SBI and HDFC bank have warned their customers regarding the crypto dealings, saying that it may suspend their account.
Due to warnings from banks to the customers, WazirX has faced issues with deposits and withdrawals of the funds of users. WazirX is one of the largest cryptocurrency bourses in India, and many people prefer using it for trading crypto. However, this month has been quite difficult for WazirX, as banks denied cryptocurrencies dealings.
It has been a huge relief to the investor community as RBI clarifies the warning from banks to customers trading cryptocurrency. To the RBI statement, Nischal Shetty who is the Founder and Chief Executive Officer of WazirX said, that it is a positive development for everyone in the investor community. He also said that the statement from the RBI clears the confusion amidst banks denying dealings in cryptocurrency to the users.
Moreover, RBI has asked the banks to work with regulations governing standards for Anti-Money Laundering, Combating of Financing Of Terrorism, Know Your Customer, and obligations of regulated entities under the Prevention of Money Laundering Act.
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