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Indian central bank clarifies rules as local banks move away from crypto

The central bank of India has issued an official notice regarding the fact that local banks are allegedly warning customers to use cryptocurrencies like bitcoin (BTC).

Published on Monday, the notice states that the Reserve Bank of India is aware of media reports that some banks have cautioned their customers by citing the RBI’s three-year-old circular against crypto.

“Such reference to the above circular by banks / regulated entities is not in order as this circular was set aside by the Hon’ble Supreme Court in the matter of writ petition on March 4, 2020,” the notice stated that the circular is now valid Is not and cannot be cited.

However, banks and other regulated financial institutions may still carry out customer due diligence procedures under the Money Laundering Prevention Act 2002 related to anti-money laundering and knowing their customer standards, the RBI noted.

The RBI statement came in response to media reports claiming that some of India’s largest banks, such as HDFC Bank and State Bank of India, have cautioned their customers against transactions in digital currencies. Some users claimed that HDFC Bank cited RBI’s 2018 order banning crypto trading in India. The ban was officially lifted in March 2020 by the Supreme Court of India.

The news adds to the current uncertainty about the legal status of crypto in India. Earlier this year, anonymous sources claimed that the government was planning to impose a complete ban on crypto.

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