Reserve Bank of India Directs Banks & Regulated Entities to Stop Deplatforming Crypto Customers

The Reserve Bank of India has released an official notification regarding cryptocurrencies in which it is directing the banks and financial institutions in the country not to cut their services to crypto customers. “Indian banks told to let citizens use their hard-earned money the way they fcking want to,” commented Mohit Sorout, founding partner at Bitazu Capital. The notice called “Customer Due Diligence for transactions in Virtual Currencies (VC)” from the central bank of the country has finally addressed the decision of the Supreme Court last year that ruled against RBI’s circular from April 2018 in which it asked the banks and financial institutions to not provide their services to the companies dealing with cryptos. “It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies,” by making a reference to the “Prohibition on dealing in Virtual Currencies (VCs)” circular from three years back, read RBI’s notice. Chief General Manager Shrimohan Yadav further said in the notice that such references by banks and regulated entities are not in order as the circular was set aside by the Supreme Court on March 04, 2020, in the matter of Writ Petition. As such, given the Supreme Court's order, the circular is no longer valid and therefore cannot be cited or quoted from. “Our RBI has finally sent out this notice to banks after 15 months since the Supreme Court verdict. Never late than never, and we have this as a reason to celebrate!” said Sathvik Vishwanath, co-founder & CEO of crypto exchange Unocoin. However, the central bank asked the banks and other entities to 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), in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.