Shaktikanta Das, Reserve Bank of India’s Governor, has clarified the bank’s position with regard to its earlier directives pertaining to crypto that they should not be referred to by banks. But he still believes that there is a whole list of concerns regarding crypto which the bank cannot and should not ignore.
There was a time in India when the Reserve Bank of India (RBI) had issued crypto directives that were to be followed by all Indian banking channels. But the directives were challenged and on the basis of the Court ruling, the directives were held illegal in 2018. However, 2018 directives were alive once again when certain banks referred to the directives for dissemination of information amongst their customers.
For instance, one of the major commercial banks of India namely HDFC wrote letters to its customers. In these letters, HDFC drew the attention of customers towards the 2018 directives of RBI. HDFC then informed customers that no customer is allowed to utilize funds lying in their respective accounts for the purchase of crypto. This sparked criticism by customers against HDFC who apprised the bank that the RBI’s directives in question have been declared as illegal. Some of the customers even went on to state that HDFC is deliberately in contempt of the judgment passed by the Indian Supreme Court.
RBI then took notice of the matter and immediately responded through a press statement. Shaktikanta Das, who is the Governor of RBI, stated in the release the directives were withdrawn by RBI a long time ago. There is no need for any bank to refer to or rely upon the directives anymore. He also suggested that if any bank opts to refer to such directives, then the burden of consequences will be borne by the bank. RBI will not be held responsible for an act that has not been warranted by RBI, clarified Das.
But later on, further remarks were made by the Governor of RBI in which Das said that the bank’s position over crypto is unchanged. He said that there are a plethora of concerns pertaining to Bitcoin and all cryptocurrencies which RBI cannot ignore at any cost. He also said that the concerns of RBI have been duly comprised in a report and the report has been submitted to the Government for consideration.
As regards the Indian crypto investors, Das was of the view that the money belongs to the investor. If the investor wants to use the money in crypto trading or any other trading, then the person is free to do so. What is most important is that crypto trading is not banned in India nor is there any plan of banning the same. However, it is the duty of the investor to make sure that he is putting his investment in the right place. If any fraud is discovered, then the investor would be solely responsible for bearing the loss, clarified Das.
RBI under the instructions of Das, later on, issued a notification to all Indian banks. In this notification, RBI informed the banks there the directives are no more in the field and should not be quoted.