RBI Says Indian Banks Can Provide Accounts to Crypto Businesses

RBI’s recent response to an information request confirms that there is no ban on Indian banks on providing services to crypto businesses.

May 26 2020 | AtoZ Markets – India’s central bank, the Reserve Bank of India, seems to finally be clarifying its stance on financial services for cryptocurrency-related businesses in the country.

In response to a right to information request, the Reserve Bank of India clarified that there are no restrictions on banks preventing them from providing an account to cryptocurrency companies or traders. Harish BV, a cofounder of local cryptocurrency exchange Unocoin was the first to file the RTI request. 

Some Indian banks reportedly refused to provide services to crypto businesses

The Reserve Bank of India, back in 2018, had issued a notification to all banks in the country prohibiting them from providing services to crypto businesses in the country or any other crypto-related activities. After the ban, several companies and traders received warning statements from their respective banks. The customers were advised to either stop their cryptocurrency activities or have their accounts suspended.

But in March, the Supreme court of India declared RBI’s banking ban on crypto exchanges as unconstitutional and reversed the bank’s decision. However, even after the Supreme court’s decision, several banks in the country reportedly refused to provide services to crypto businesses. This outcome prompted Unicoin cofounder to file the RTI. 

Related: India Crypto Exchanges Seek Legal Status Clarifications From RBI

India has no bill regulating the crypto industry

The Supreme court’s decision to declare RBI’s banking ban on crypto might have relieved the crypto industry in the country. But the crypto regulations in India are still in a grey zone. The lawmakers still have to pass a law setting rules and regulations for the crypto industry in India.

Earlier, an inter-ministerial group had proposed a full ban on the crypto use in India. However, the proposal is yet to come into the lower house of the parliament of India. At the moment, all India crypto exchanges can carry out their businesses. 

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