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RBI Tells Banks To Reconsider Ties With Crypto Exchanges And Traders

RBI

The Central Bank of India which is the Reserve Bank of India (RBI) is informally and indirectly asking and urging the other banks and lenders to break all the ties with Cryptocurrency exchanges and traders as there is no idea as to when this highly unpredictable market will boom. However, the Supreme Court had passed a ruling that it is not going to ban crypto currency and the banks can work with the crypto industries.

The central bank, back in the year 2018, had forbidden all the other banks to deal with any transactions related to bitcoins or any other crypto currencies or assets. However, the crypto community in India challenged this order and fought back and just recently, in March 2020, India’s Supreme Court overturned this dictate and lifted over the RBI’s ban and gave freedom to the banks and lenders to extend the bank facilities to crypto currency.

Thousands of new investors and buyers are joining the system every day. The prises of various major currencies have been on the rise. As of today, India has over 10 million crypto investors with total holdings of over 100 billion rupees ($1.36 billion).

A senior executive from one of the banks who was asked to comment on the matter said- “The regulator has been unofficially asking us that why are we dealing in such business when it is ultra-speculative. A lot of money flows overseas via this trade which the RBI is not comfortable with as it may lead to money laundering.”

When asked to comment, the RBI refused to respond to any requests for comments.

ICICI Bank has already asked its payment services it is associates with to stop all the transactions related to crypto currencies. When asked to comment, it refused to do it as well.

All the major banks and lenders are refusing to comment on this as no formal regulation is passed.

One of the sources involved in the matter said- “Even though the discussions are informal that is enough. No one wants to go against the regulator.”

Axis Bank, Kotak Mahindra Bank, Citibank and other lenders and banks are also restraining their relations with the cryptocurrency market.

The CEO of a global crypto exchange which also deals in India, whose identity is currently anonymous, said-“Axis Bank has taken a fairly negative stance against crypto. They are citing internal policy and risk measures and have stopped transactions with crypto exchanges”

IndusInd Bank has also asked its associations to stop all crypto related transactions at the earliest.

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