RBI governor “surprised” that Indian banks cited 2018 laws to block crypto users

Reserve Bank of India (RBI) governor Shaktikanta Das said this week the central bank has ‘no change’ with regards to its approach towards the crypto sector, local outlet Business Standard reported today.

Crypto surprise

Das stated he was “surprised” with local banks citing a (void) circular from 2018 for denying services to crypto businesses and users. The circular was put aside by the Supreme Court, the country’s highest legal authority, in mid-2020.

However, not all is well. Das said the bank continued to have major concerns about the way cryptocurrencies are included as part of the broader financial system.

“There is no change in RBI’s stance on cryptocurrencies. We have major concerns regarding cryptocurrencies and this has been conveyed to the government. Each investor should take careful and prudent calls on their investments,” said Das.

He added to RBI’s earlier comments from earlier this week. “Such references to the above circular by banks, regulated entities are not in order as this circular was set aside by the Supreme Court on March 04, 2020,” he said, adding:

“As such, in view of the order of the Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from.”

First action, then an apology

The comments come days after the RBI slammed banks in India. “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 RBI circular dated April 06, 2018,” the bank stated at the time.

The statement itself came after banks like HDFC, SBI, and others sent out curricula to crypto-linked customers and businesses stating they would not support transactions to and from crypto businesses like exchanges or wallets.

Meanwhile, the banks have since changed their stance, as the below tweet shows.

HDFC Bank cites quashed RBI Circular to warn crypto traders of restrictions.#cryptocurrency #Bitcoin #SupremeCourt https://t.co/LMuyNNsnuK

— Crypto Vakil (@CryptoVakil) May 31, 2021

In an email to clients earlier this week, HDFC told customers to “ignore” the earlier communication. So much for institutional adoption.

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