The Central Bank of India has released an official statement that local banks are warning customers against using cryptocurrencies such as bitcoins (BTC).

The announcement, written on Monday, said the Reserve Bank of India is aware of media reports that some banks have warned their clients about cryptocurrency, citing a circular issued by the Reserve Bank of India (RBI) that was canceled three years ago.

The announcement states: “Such references to the above circular from banks / regulated entities are inappropriate as this circular was overturned by a Supreme Court recognized on March 4, 2020 when it comes to filing an injunction application,” emphasizing that the circular is no longer valid and cannot be quoted.

However, regulated banks and financial institutions may still enforce money laundering-related customer control processes and knowledge standards under the Money Laundering Prevention Act of 2002, RBI notes.

RBI’s announcement came in response to media reports claiming that some of India’s largest banks, such as HDFC Bank and State Bank of India, have warned their clients against trading cryptocurrencies. Some users claimed that HDFC Bank quoted the 2018 RBI ruling banning cryptocurrency trading in India. The ban was formally lifted in March 2020 by the Supreme Court of India.

This news heightens the uncertainty over the legal status of cryptocurrencies in India. Earlier this year, anonymous sources claimed the government was planning a complete ban on cryptocurrency.

LEAVE A REPLY