Indian Banks Banned From Dealing in Cryptocurrencies
The Deputy Governor of RBI, BP Kanungo, just announced officially that all the services dealing with cryptocurrencies will be banned with immediate effect. So essentially none of the entities regulated by RBI would be able to provide services related to cryptocurrencies to customers.
Almost all of the banks in India are directly or indirectly regulated by RBI, so none of these banks would be allowed to provide services to Cryptocurrency exchanges. The existing entities would have to terminate their relationships in a maximum of 3 months.
In essence, individuals wouldn’t be able to send money from their bank accounts to their crypto wallets. They won’t be able to receive any money from their crypto wallets to their bank accounts either. As for now, you can exchange cryptocurrencies using your crypto wallets but if we take this immediate ban by RBI into consideration, it wouldn’t be overly surprising to find that there is a ban on using crypto wallets in India.
Right now, it is a bit too early to say that this is a complete ban—we would need to wait a little more to be sure about it—owing to the lack of details in which things were discussed.
The Indian government is enthusiastic about the blockchain technology. However, the same can’t be said about cryptocurrencies. BP Kanungo mentioned towards the end that there has been an inter-departmental committee already formed to explore how feasible and desirable would a virtual currency issued and backed by the Indian government would be.
A thing to rejoice is that the State Bank of Sikkim is not regulated by the RBI. So if you’re someone who has a bank account in State Bank of Sikkim, you might be one of the few who might be able to escape the wrath of RBI.
That said, the ban seems to be a temporary one since almost every other country is welcoming cryptocurrencies with arms wide open. India wouldn’t stay back for long.