RBI bans cryptocurrencies, prohibit banks from virtual currency dealings

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The Reserve Bank of India (RBI) has prohibited the banks and financial institutions from dealing with cryptocurrencies and reminded them regarding the repeated warnings associated with the risks.

“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs (virtual currencies),” said the RBI in its official communiqué.

The banking regulator is expected to issue a warning soon in this regard. It is also going to provide three –month buffer time to the entities to detach themselves with the business and associations pertaining to virtual currencies.

While presenting the Budget 2018, Union Finance Minister Arun Jaitley said cryptocurrency is not legal in India and the Centre is discouraging its use in the country.

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