The Reserve Bank of India (RBI) is unofficially pressuring banks, urging them to reassess ties with cryptocurrency exchanges and traders, according to Reuters citing its own sources.
In 2018, the RBI barred banks from conducting transactions related to Bitcoin and other similar assets. Crypto companies challenged the diktat, and in March 2020 the Supreme Court of India struck down the central bank’s decision, allowing credit and financial institutions to provide them with banking services.
The RBI later confirmed that there were no longer any restrictions.
“The regulator is unofficially asking us why we deal with such a business, given its highly speculative nature. Through crypto trading, a lot of funds flow abroad, which is uncomfortable for the RBI, as it could lead to money laundering,” said a senior executive at one of the banks, who spoke to the agency.
Sources told Reuters that private ICICI Bank has already asked its payment-service providers to halt all cryptocurrency-related transactions.
Axis Bank, Citibank, Kotak Mahindra Bank, IndusInd Bank and other institutions are restricting their presence in the digital-asset market.
“While the discussions are informal, that is enough. No one wants to go against the regulator,” said one of the sources.
Earlier Reuters reported that in India a bill to ban cryptocurrency operations in full will be considered, which provides criminal and administrative responsibility for miners and traders.