RBI: Indian Crypto Startups Are Not Prohibited From Using Banking Services

Just recently, India was said to have welcomed cryptocurrency after the Supreme Court had dismissed restrictions on crypto trading in the country. This was a quash on the RBI order that was made in 2018, which restricted banks from partnering with cryptocurrency startups -claiming it to be illegal.

With the Supreme Court’s mandate, the Reserve Bank of India (RBI) had no choice but to withdraw its order on the matter, and traders are expected to be free to transact with cryptocurrencies without any restrictions.

It is, therefore, surprising to see traders lamenting that banks have continued to impose restrictions on crypto trade despite the Supreme Court ruling. This attracted the concern of Unocoin co-founder, BV Harish, who filed a Right to Information (RTI) query on April 25 to the Bank of India (RBI). He questioned if RBI had prohibited banks from providing accounts to crypto exchange companies or crypto traders.

RBI clarifies 

In response to this query, the RBI has clarified that it did not issue any of such prohibitions, saying “as on date, no such prohibition exists.”

The RBI’s clarification is no doubt a relief for Harish and the concerned cryptocurrency traders in the country as they can now access banking services without prohibition.

“Bankers have been saying that they need new RBI circulars mentioning that there are no more restrictions for them to provide bank accounts for crypto businesses. Now, we have received a positive response from RBI” He said, expressing his relief on the doubts on the matter.

Even though the Supreme Court had initially lifted this ban, a complementing statement from RBI was also needed to clear necessary doubts, CEO of Binance recently acquired exchange, WazirX, Nischal Shetty, also made his comment regarding saying: 

While the Supreme Court ruling had made it very clear that there are no curbs on banking for crypto businesses, the RBI reply to RTI filing is very much welcome. There has been confusion amongst many banks despite the Supreme Court ruling because these banks have been waiting for information from RBI. We can now expect all the banks to start servicing crypto businesses without any curbs.