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RBI cautions users of virtual currencies

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The Reserve Bank of India (RBI) has recently warned the users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security-related risks involved.

The RBI recently said it has not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin or any virtual currency,reported the Indian Express.

In its official communication RBI said, “As such, any user, holder, investor, trader, etc, dealing with virtual currencies will be doing so at their own risk”.

“The creation, trading or usage of VCs as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities,” RBI added.

Furthermore, the central bank also said that non-banking financial company micro financial institutions (NBFC-MFIs) shall ensure that the average interest rate on loans sanctioned during a quarter does not exceed the average borrowing cost during the preceding quarter plus the margin.

 

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