The Reserve Bank of India has clarified its stance on cryptocurrencies, stating that there is no ban on banking services for accounts dealing with cryptocurrencies.
It has also allowed banking institutions to do their due diligence for clients who are involved in digital assets:
“However, banks, as well as other entities mentioned above, may continue to conduct customer due diligence processes in accordance with the regulations governing the standards for Know Your Customer (KYC), Anti-Money Laundering ( AML), Fight against the financing of terrorism (CFT) and the obligations of regulated entities under the Prevention of Money Laundering Act (PMLA), 2002, in addition to ensuring compliance with the relevant provisions of the Management Act Foreign Exchange (FEMA) for remittances abroad ”.
Over the past few weeks, major banks such as HDFC Bank and SBI Card have officially warned their clients against conducting cryptocurrency transactions, citing the 2018 RBI circular.
However, the central bank points out the fact that the circular is no longer valid:
"As such, in view of the order of the Honorable Supreme Court, the circular is no longer valid as of the date of the Supreme Court ruling and therefore cannot be cited or cited."
As reported by Crypto Report, the infamous cryptocurrency ban, which prohibited banks from dealing with the cryptocurrency industry, was overturned by the Supreme Court in March 2020.
A recent report by The Economic Times also suggests that the Indian government may give its draconian plan to ban crypto holding, trading and mining "a new look."