India’s Central Bank Denies Prohibiting Financial Institutions from Servicing Cryptocurrency Exchanges
Indian commercial banks refusing services to local cryptocurrency exchanges may soon have a case to answer following a recent clarification offered by its central bank.
Tweeting on Sunday, Indian crypto insider Crypto Kanoon (@cryptokanoon) published a document released by the Reserve Bank of India (RBI) stating that no prohibitions against banks servicing crypto-businesses exist.
The RBI’s statement was in response to a previous right to information (RTI) request filed by Harish BV, co-founder of the Unocoin crypto exchange in India. Despite the Supreme Court ruling vacating the RBI’s 2018 ban, commercial banks in India are still reportedly denying services to cryptocurrency businesses.
By refusing to facilitate crypto-related transfers, exchanges are reportedly experiencing difficulties in carrying out INR deposits and withdrawals. With the RBI statements, crypto businesses might be able to put these banks on notice.
The behavior of the banks also highlights how the Supreme Court’s RBI ban reversal is perhaps not enough to remove the hurdles faced by India’s crypto industry. Last year, there were reports of a likely blanket ban on cryptocurrencies including a proposal for prison sentences for people found to be involved in virtual currency dealings.