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RBI: Banks can’t cite 2018 crypto-ban order quashed by SC to caution customers against virtual currencies

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Reserve Bank of India (RBI)Reserve Bank of India (RBI)RBI stated that banks might also guarantee “compliance with related provisions below Overseas Alternate Administration Act (FEMA) for abroad remittances.”

Amid current media experiences of sure banks citing the 2018 crypto ban by the Reserve Financial institution of India (RBI) to warning their clients towards dealing in digital currencies resembling Bitcoin, Ethereum, others, the Central financial institution on Monday instructed banks that they can not check with the outdated order that was quashed by the Supreme Court docket final 12 months. In a notification to all business and co-operative banks, cost banks, small finance banks, NBFCs, in addition to cost system suppliers, the Chief Common Supervisor Shrimohan Yadav stated, “Such references (by sure banks and controlled entities) to the round by banks/ regulated entities are usually not so as as this round was put aside by the Hon’ble Supreme Court docket on March 04, 2020.” He added, “As such, in view of the order of the Hon’ble Supreme Court docket, the round is now not legitimate from the date of the Supreme Court docket judgement, and subsequently can’t be cited or quoted from.”

“It’s nice to lastly see this clarification from RBI to all banks. There was confusion amongst banks and this notification clears it. Banks are actually free to work with crypto exchanges,” Nischal Shetty, Founder and CEO, WazirX instructed Monetary Categorical On-line.

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RBI, nevertheless, stated that banks “might” proceed to hold out buyer due diligence processes according to laws governing requirements for Know Your Buyer (KYC), Anti-Cash Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities below Prevention of Cash Laundering Act, (PMLA), 2002. That is aside from “making certain compliance with related provisions below Overseas Alternate Administration Act (FEMA) for abroad remittances.”

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